Interim Operations. (a) From the date hereof until the earlier of the Closing or termination of this Agreement, Seller shall (i) operate the Business only in the Ordinary Course of Business, including maintaining appropriate service levels, and in compliance with applicable Law including any COVID-19 Measures; and (ii) use commercially reasonable efforts to (A) maintain and preserve intact the business organization and goodwill of the Business, the Assets and the Assumed Liabilities, (B) maintain satisfactory relationships with Seller’s clients, operators, distributors, customers, insurance underwriters and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services of, the Business Employees. (b) Without limiting the generality of the foregoing, except as set forth in Section 5.1(b) of the Disclosure Schedule, as expressly permitted by this Agreement or as approved in writing by ▇▇▇▇▇, from the date hereof until the earlier of the Closing or the termination of this Agreement, Seller shall not take any action which would require disclosure on Section 2.8 of the Disclosure Schedule or: (i) take or omit to take any action that results or may reasonably be expected to result in any of the representations and warranties of Seller or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfied; (ii) amend or otherwise change the organizational documents of Seller; (iii) (A) authorize, issue, sell or transfer any membership interests or other securities of Seller, (B) adjust, split, combine or reclassify or otherwise amend the terms of any membership interest or other security of Seller, (C) declare, authorize, set aside make or pay any dividend or other distribution (whether in cash, stock or other property) or (D) enter into any agreement with respect to the voting of any equity of Seller; (iv) (A) merge or consolidate with any other Person, acquire any business or assets of any other Person (whether by merger, stock purchase, asset purchase or other business combination), other than the purchase of supplies in the Ordinary Course of Business or (B) form any new Subsidiary; (v) (A) materially change the operation of the Business, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of business; (vi) make any loans, advances or capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of Business); (vii) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause); (viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on or otherwise encumber any Assets, other than in the Ordinary Course of Business; (ix) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate; (x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C); (xi) incur any Indebtedness or issue any debt securities or warrants or other rights to acquire debt securities of Seller or assume, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person for Indebtedness or capital obligations, in the case of any of the foregoing; (xii) cancel any debts owed to or claims held by Seller in excess of $35,000; (xiii) abandon, disclaim, dedicate to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreement; (xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller; (xv) revalue any of the assets of the Seller, except as required by GAAP, or enter into, or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contract; (xvi) (A) change any method of accounting or accounting practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Business; (xvii) make, revoke or change any Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date; (xviii) modify, amend or terminate (other than pursuant to the expiration of its term other than as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunder; (xix) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property; (xx) commence, settle or compromise any Proceeding; (xxi) cancel, materially reduce or fail to maintain any insurance policy; (xxii) change or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect; (xxiii) engage in any transaction with any Related Parties; or (xxiv) authorize or enter into any agreement, commitment or understanding (whether written or oral) with respect to the foregoing.
Appears in 1 contract
Sources: Asset Purchase Agreement (Tivic Health Systems, Inc.)
Interim Operations. (a) From Prior to the date hereof until the earlier of the Closing or termination of this Agreement, Seller shall (i) operate the Business only in the Ordinary Course of Business, including maintaining appropriate service levels, and in compliance with applicable Law including any COVID-19 Measures; and (ii) use commercially reasonable efforts to (A) maintain and preserve intact the business organization and goodwill of the Business, the Assets and the Assumed Liabilities, (B) maintain satisfactory relationships with Seller’s clients, operators, distributors, customers, insurance underwriters and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services of, the Business Employees.
(b) Without limiting the generality of the foregoingEffective Time, except as set forth in Section 5.1(b) of the Company Disclosure Schedule, as expressly permitted by this Agreement Schedule or as approved in writing contemplated by ▇▇▇▇▇, from the date hereof until the earlier of the Closing or the termination any other provision of this Agreement, Seller shall not take any action which would require disclosure on Section 2.8 of unless Parent has consented in writing thereto, the Disclosure Schedule orCompany:
(i) take or omit to take any action that results or may reasonably be expected to result shall, and shall cause the Company Subsidiary to, conduct its operations in any of the representations and warranties of Seller or ordinary course consistent with the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfiedmanner as heretofore conducted;
(ii) amend or otherwise change shall use commercially reasonable efforts, and shall cause the organizational documents Company Subsidiary to use commercially reasonable efforts, to preserve intact their business organizations and goodwill, keep available the services of Sellertheir respective officers and employees and maintain satisfactory relationships with those persons having business relationships with them;
(iii) (A) authorizeshall not, issueand shall cause the Company Subsidiary not to, sell amend their respective Certificates of Incorporation or transfer any membership interests Bylaws or other securities of Seller, (B) adjust, split, combine or reclassify or otherwise amend the terms of any membership interest or other security of Seller, (C) declare, authorize, set aside make or pay any dividend or other distribution (whether in cash, stock or other property) or (D) enter into any agreement with respect to the voting of any equity of Sellercomparable governing instruments;
(iv) (A) merge or consolidate with any other Person, acquire any business or assets shall give prompt notice to Parent of any other Person (whether representation or warranty made by mergerit contained in this Agreement becoming untrue or inaccurate such that the condition set forth in Section 6.3(a)(ii) would not be satisfied; provided, stock purchasehowever, asset purchase that no such notification shall affect the representations, warranties, covenants or other business combination), other than agreements of the purchase parties or the conditions to the obligations of supplies in the Ordinary Course of Business or (B) form any new Subsidiaryparties under this Agreement;
(v) (A) materially change shall, upon receiving any written notice from any Taxing authority proposing any adjustment to any Tax relating to the operation of the Business, Assets Company or the Assumed Liabilities or any method of purchaseCompany Subsidiary, salegive prompt written notice thereof to Parent, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of businesswhich notice shall describe in detail each proposed adjustment;
(vi) make any loanssubject to the provisions of Section 5.1, advances or capital contributions shall not, and shall not permit the Company Subsidiary to, (A) acquire or investments inagree to acquire by merging or consolidating with, or by acquiring any capital stock of or purchasing a substantial portion of the assets of, or by any other manner, any Person business or any corporation, partnership, joint venture, association or other business organization or division thereof, or (B) acquire or agree to acquire assets other than advances of expenses to Business Employees in the Ordinary Course ordinary course of Business)business and except for capital expenditures made in accordance with clause (xviii) below and except for in-licenses of technology, the cost of which does not exceed $1,000,000 individually or $2,000,000 in the aggregate, or (C) release or relinquish or agree to release or relinquish any material contract rights;
(vii) shall not, and shall not permit the Company Subsidiary to, effect any stock split or otherwise change its capitalization or issue any shares of its capital stock or securities convertible into or exchangeable or exercisable for shares of its capital stock, except (A) institute or announce any increase in upon exercise of options to purchase shares of Company Common Stock under the compensationCompany Stock Option Plans, bonuses or other benefits payable to any Business Employees, and except (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) pursuant to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause)the Stock Purchase Plan;
(viii) transfershall not, leaseand shall not permit the Company Subsidiary to, licensegrant, guaranteeconfer or award any options, sellwarrants, mortgageconversion rights or other rights, pledgenot existing on the date hereof, dispose to acquire any shares of its capital stock or incur any Lien on other securities of the Company or otherwise encumber any Assetsthe Company Subsidiary, other than (a) the issuance of Company Options to newly hired employees, consistent with past practice or (b) as set forth in Section 5.2(a)(viii) of the Ordinary Course of BusinessCompany Disclosure Schedule;
(ix) acquire shall not, and shall not permit the Company Subsidiary to, take or fail to take any real property action which would, or undertake or commit to undertake capital expenditures would be reasonably likely to, prevent the accounting for the purchase Merger as a pooling of equipment or tangible assets exceeding $35,000 interests in accordance with APB No. 16, the aggregate;interpretive releases issued thereto, and the pronouncements of the SEC.
(x) agree shall not, and shall not permit the Company Subsidiary to, request take or adopt (Afail to take any actions which would, or would be reasonably likely to, prevent the Merger from qualifying as a reorganization with the meaning of Section 368(a) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C)Code;
(xi) incur shall not, and shall not permit the Company Subsidiary to, amend in any Indebtedness material respect, except as required by applicable law or issue any debt securities or warrants or other rights in response to acquire debt securities of Seller or assume, guarantee or endorse, as an accommodation or otherwisechanges in applicable law, the obligations terms of any Person for Indebtedness Company Plan, including, without limitation, any employment, severance or capital obligationssimilar agreements or arrangements in existence on the date hereof, or adopt any new employee benefit plans, programs or arrangements or any employment, severance or similar agreements or arrangements, or change in any respect any vesting schedule with respect to any Company Plan or grant or award thereunder, or grant any salary increases to any employee of the Company or the Company Subsidiary above that amount previously disclosed in writing by the Company to Parent, except in the case ordinary course of any business consistent with past practice to non-officers of the foregoingCompany or the Company Subsidiary, except that (A) the Company may hire employees in the ordinary course of business consistent with past practice and (B) this subsection (xi) shall not preclude Company from making payments under Company Plans;
(xii) cancel shall notify Parent in writing promptly upon receiving notice from any debts owed employee of the Company or the Company Subsidiary of such employee's intention to terminate employment with the Company or claims held by Seller in excess of $35,000the Company Subsidiary;
(xiii) abandonshall not, disclaimand shall not permit the Company Subsidiary to, dedicate to except in the publicordinary course of business consistent with past practice, sell, assign change in any respect the compensation arrangements for the sales force of the Company or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreementthe Company Subsidiary;
(xiv) disclose shall not, and shall not permit the Company Subsidiary to, except in the ordinary course of business consistent with past practice, grant any confidential or proprietary information or confidential Business Intellectual Property promotion to any Person, other than employees management level employee of Seller that are subject to a confidentiality the Company or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the SellerCompany Subsidiary;
(xv) revalue any of shall not, and shall not permit the assets of the SellerCompany Subsidiary to, except as required by GAAPin the ordinary course of business consistent with past practice, (x) incur, create, assume or enter intootherwise become liable for borrowed money or assume, guarantee, endorse or permit otherwise become responsible or liable for the obligations of any of the assets of the Seller other individual, corporation or other entity or (y) make any loans or advances to become bound by any Contract that is or would constitute a Material Contractother person;
(xvi) shall not, and shall not permit the Company Subsidiary to, (A) change any method of accounting or accounting practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Business;
(xviix) make, revoke or change any election with respect to Taxes or (y) settle or compromise any Tax election by Seller that could adversely impact liability;
(xvii) shall not, and shall not permit the amount Company Subsidiary to, (y) declare, set aside or pay any dividend or make any other distribution or payment with respect to any shares of Taxes due its capital stock or payable other ownership interests or (and/or z) directly or indirectly redeem, purchase or otherwise acquire any direct shares of its capital stock or indirect owner capital stock of equity interests in Buyer) after the Closing DateCompany Subsidiary, or make any commitment for any such action;
(xviii) modifyshall not, amend or terminate (other than pursuant to and shall not permit the expiration Company Subsidiary to, make any capital expenditures which in the aggregate are in excess of its term other than as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunder$1,000,000;
(xix) fail shall not, and shall not permit the Company Subsidiary to, solicit to pay hire or hire any required maintenance employee of Parent; provided, however, that nothing in this Section 5.2(a)(xix) shall prevent the Company or the Company Subsidiary from publishing any general advertisement or similar notice in any newspaper or other similar fees publication or otherwise fail from hiring any person pursuant to make required filings such advertisement or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Propertynotice;
(xx) commenceshall use reasonable efforts to not, settle and shall use reasonable efforts to cause the Company Subsidiary to not, contact Parent's sales representatives, customers, vendors or compromise any Proceedingstrategic partners, the names of which have been provided by Parent to the Company, concerning Parent or the Merger, without Parent's prior written consent, which consent shall not be unreasonably withheld;
(xxi) cancelshall not, materially reduce or fail to maintain and shall not permit the Company Subsidiary to, make any insurance policy;public disclosure regarding its understanding of Parent's plan for integrating the operations of the Company with those of Parent and any of its Subsidiaries; and
(xxii) change shall not, and shall not permit the Company Subsidiary to, agree, in writing or modify otherwise, to take any of the Seller’s creditforegoing actions.
(b) Prior to the Effective Time, collectionexcept as set forth in the Parent Disclosure Schedule or as contemplated by any other provision of this Agreement, unless the Company has consented in writing thereto, Parent:
(i) shall, and shall cause Merger Sub to, give prompt notice to the Company of any representation or payment policieswarranty made by it contained in this Agreement becoming untrue or inaccurate such that the condition set forth in Section 6.2(a)(ii) would not be satisfied; provided, procedures however, that no such notification shall affect the representations, warranties, covenants or practicesagreements of the parties or the conditions to the obligations of the parties under this Agreement;
(ii) shall not, including acceleration and shall not permit any of collections or receivables (whether or not past due) in any material respect its Subsidiaries to, take or fail to pay take any action which would, or delay payment would be reasonably likely to, prevent the accounting for the Merger as a pooling of payables or other Liabilities interests in any material respectaccordance with APB No. 16, the interpretive releases issued thereto, and the pronouncements of the SEC;
(xxiiiiii) engage shall not, and shall not permit any of its Subsidiaries to, take or fail to take any actions which would, or would be reasonably likely to, prevent the Merger from qualifying as a reorganization with the meaning of Section 368(a) of the Code;
(iv) shall not, and shall not permit any of its Subsidiaries to, solicit to hire or hire any employee of the Company; provided, however, that nothing in this Section 5.2(b)(iv) shall prevent Parent or any Subsidiary from publishing any general advertisement or similar notice in any transaction with newspaper or other publication or from hiring any Related Parties; orperson pursuant to such advertisement or notice;
(xxivv) authorize shall use reasonable efforts to not, and shall use reasonable efforts to cause its Subsidiaries to not, contact the Company's sales representatives, customers, vendors or enter into strategic partners, the names of which have been provided by the Company to Parent, concerning the Company or the Merger, without the Company's prior written consent, which consent shall not be unreasonably withheld;
(vi) shall not, and shall not permit any agreementof its Subsidiaries to, commitment make any public disclosure regarding Parent's plan for integrating the operations of the Company with those of Parent and any of its Subsidiaries; and
(vii) shall not, and shall not permit any of its Subsidiaries to, agree, in writing or understanding (whether written or oral) with respect otherwise, to take any of the foregoingforegoing actions.
Appears in 1 contract
Sources: Merger Agreement (Guidant Corp)
Interim Operations. (a) From the date hereof until Until the earlier of the Closing or the ------------------ termination of this Agreement, Seller shall (i) operate the Business only in the Ordinary Course of Business, including maintaining appropriate service levelsCompany shall, and shall cause its subsidiaries to, unless Purchaser shall otherwise consent in compliance writing, conduct the operations of the Inkjet Business and of O-Sub according to their respective usual, regular and ordinary course of business consistent with applicable Law including any COVID-19 Measures; past practice and (ii) use commercially reasonable best efforts to (A) maintain and preserve intact their respective business organizations and goodwill, to keep available the business organization services of their officers and goodwill of the Business, the Assets employees and the Assumed Liabilities, (B) to maintain satisfactory relationships with Seller’s clientscustomers, operatorssuppliers, distributors, customersbrokers, insurance underwriters sales agents and all other third parties persons having business dealings relationships with Sellerthem, (C) pay its debts including through the payment of additional compensation reasonably acceptable to Purchaser to such distributors, brokers and Taxes when due (subject sales agents reasonably calculated to good faith disputes regarding such debts maintain at least the current level of merchandising, distribution and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services of, the Business Employees.
(b) shelving. Without limiting the generality of the foregoing, except as set forth in Section 5.1(b) of the Disclosure Schedule, as expressly permitted by this Agreement or as approved in writing by ▇▇▇▇▇, from the date hereof until the earlier of the Closing or the termination of this Agreement, Seller unless Purchaser shall otherwise consent in writing, the Company will:
(a) not take pledge, sell, lease, assign, transfer or otherwise dispose of (by merger or otherwise) any action which would require disclosure on Section 2.8 of (i) the O-Sub Shares (other than pursuant - to the Loan and Pledge Agreement) or (ii) the Business Assets or Secondary -- Assets (including, without limitation, receivables, leasehold interests or third party licenses or assignments of Intellectual Property and including any sale leaseback transaction) except for the sale of inventory in the ordinary course of business;
(b) not effect any stock split, reverse stock split, stock dividend, subdivision, reclassification of the Disclosure Schedule or:O-Sub Shares, or otherwise change the capitalization of the O-Sub as it exists on the date hereof;
(c) preserve and maintain all the properties used in or relating to the Business Assets and Secondary Assets in a normal state of repair, order and condition, reasonable wear and use excepted;
(d) keep all the Business Assets and Secondary Assets insured (to the extent presently insured) against any loss, either by fire, other casualty, or theft and give notice to Purchaser of any loss involving any of the Business Assets or Secondary Assets if such loss is at least $50,000 or more and discuss with Purchaser whether the proceeds of any claim made in connection with the loss should be used to replace any property damage or loss. Any proceeds not used to replace lost or damaged property shall be for the account of Purchaser if the Inkjet Option is exercised and consummated at the Closing;
(e) not enter into any contract, agreement or commitment relating to all or any part of the business conducted by O-Sub, the Business Assets or Secondary Assets except for contracts, agreements or commitments in the ordinary course of business consistent with past practice;
(f) maintain all the books, accounts and records relating to O-Sub and the Inkjet Business in the usual, regular and ordinary manner, on a basis consistent with prior years;
(g) promptly advise Purchaser in writing of any material adverse change in the business, operations, financial condition or prospects of O- Sub or the Inkjet Business or in the Business Assets, Secondary Assets or Business Liabilities;
(h) comply in all material respects with the provisions of all laws, regulations, ordinances and judicial decrees applicable to the conduct of O-Sub and the Inkjet Business;
(i) promptly notify Purchaser of the institution of any legal proceeding which may individually or in the aggregate have a material adverse effect on the business, operations, properties, financial condition or prospects of O-Sub and the Inkjet Business taken as a whole;
(j) prosecute and maintain all Intellectual Property used or held for use in connection with the Inkjet Business or the business of O-Sub; and
(k) not take or omit to take any other action that results or may reasonably be expected to result in any of the representations and warranties of Seller or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfied;
(ii) amend or otherwise change the organizational documents of Seller;
(iii) (A) authorize, issue, sell or transfer any membership interests or other securities of Seller, (B) adjust, split, combine or reclassify or otherwise amend the terms of any membership interest or other security of Seller, (C) declare, authorize, set aside make or pay any dividend or other distribution (whether in cash, stock or other property) or (D) nor enter into any agreement with respect to which would have the voting effect of any equity (i) frustrating the purpose of Seller;
(iv) (A) merge or consolidate with any other Person, acquire any business or assets of any other Person (whether by merger, stock purchase, asset purchase or other business combination), other than the purchase of supplies in the Ordinary Course of Business or (B) form any new Subsidiary;
(v) (A) materially change the operation of the Business, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of - this Agreement or (Bii) enter into a new line preventing or disabling the Company from delivering -- the Business Assets, the Secondary Assets upon exercise of business or abandon or discontinue an existing line the Inkjet Option, delivering the O-Sub Shares upon exercise of business;
(vi) make any loans, advances or capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of Business);
(vii) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on Subsidiary Stock Option or otherwise encumber any Assets, other than in the Ordinary Course of Business;
(ix) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay performing its debts as they become due, or (D) any other thing obligations under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur any Indebtedness or issue any debt securities or warrants or other rights to acquire debt securities of Seller or assume, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person for Indebtedness or capital obligations, in the case of any of the foregoing;
(xii) cancel any debts owed to or claims held by Seller in excess of $35,000;
(xiii) abandon, disclaim, dedicate to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP this Agreement;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;
(xv) revalue any of the assets of the Seller, except as required by GAAP, or enter into, or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contract;
(xvi) (A) change any method of accounting or accounting practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Business;
(xvii) make, revoke or change any Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date;
(xviii) modify, amend or terminate (other than pursuant to the expiration of its term other than as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunder;
(xix) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property;
(xx) commence, settle or compromise any Proceeding;
(xxi) cancel, materially reduce or fail to maintain any insurance policy;
(xxii) change or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;
(xxiii) engage in any transaction with any Related Parties; or
(xxiv) authorize or enter into any agreement, commitment or understanding (whether written or oral) with respect to the foregoing.
Appears in 1 contract
Sources: Asset and Subsidiary Stock Option Agreement (Raster Graphics Inc)
Interim Operations. (a) From the date hereof and until the earlier of the Closing or termination of this AgreementDate, Seller shall (i) operate USX and Holdings agree that they will cause Transtar and each of the Business only in the Ordinary Course of Business, including maintaining appropriate service levels, and in compliance with applicable Law including any COVID-19 Measures; Transtar Companies to and (ii) use commercially reasonable efforts to (A) maintain Transtar will and preserve intact the business organization and goodwill will cause each of the BusinessTranstar Companies to:
(a) Except as expressly contemplated by, or as required to implement this Agreement, conduct their business and maintain their assets only in the Assets ordinary course and the Assumed Liabilities, (B) maintain satisfactory relationships consistent with Seller’s clients, operators, distributors, customers, insurance underwriters and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services of, the Business Employees.past practice;
(b) Without limiting Duly and punctually pay and perform all of its contractual obligations in accordance with the generality terms thereof;
(c) Not sell, pledge or assign any capital stock of any Transtar Company nor issue or agree to issue any share of its capital stock;
(d) Except as expressly contemplated by, or as required to implement this Agreement, not amend any of the foregoing, except as set forth in Section 5.1(b) Constituent Documents of Transtar or any of the Disclosure ScheduleTranstar Companies;
(e) Not acquire any assets or the securities of any person other than in the ordinary course of business consistent with past practice;
(f) Not dispose of any assets other than (i) the sale of obsolete equipment and supplies in the ordinary course of business consistent with past practice or (ii) the sale or lease of real property in the ordinary course of business consistent with past practice;
(g) Not make any capital authorizations or expenditures, as expressly permitted by this Agreement or as approved enter into any agreements in writing by connection therewith, other than for amounts and items in the form of and contemplated in the 2000 Capital Plan (including the amendment in respect of the Bessemer Car Fleet specified in the Letter dated May 30, 2000 from ▇▇▇▇▇▇ ▇▇▇▇▇▇ to ▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇) and which do not exceed $31,434,000 in the aggregate with respect to USX Companies and $16,526,000 in the aggregate with respect to Holdings Companies;
(h) Except as contemplated in the 2000 Business Plan, from the date hereof until the earlier of not enter into any contract or agreement that would (i) constitute a Material Contract or (ii) any contract for a term longer than six months (assuming that all cancellation rights are promptly exercised on the Closing Date or the termination of this Agreement, Seller shall not take any action which would require disclosure on Section 2.8 of the Disclosure Schedule or:as soon thereafter as possible);
(i) take or omit to take Not establish nor amend any action that results or may reasonably be expected to result employee benefit plan except as contemplated in any of the representations and warranties of Seller or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfiedArticle III hereof;
(iij) amend Not grant any salary or otherwise change wage increase or pay any bonus except for increases granted to employees other than elected officers in accordance with the organizational documents of Sellerexisting program or except as explicitly agreed to in writing by USX and Holdings;
(iiik) Not incur, guarantee or become liable for any indebtedness for money borrowed, except for guarantees (Ai) authorizemade by one of the Holdings Companies for the benefit of another Holdings Company; or (ii) made by one of the USX Companies for the benefit of another USX Company.
(l) Not declare, issueset aside, sell pay or transfer make any membership interests or other securities of Seller, (B) adjust, split, combine or reclassify or otherwise amend the terms distribution in respect of any membership interest or other security of Seller, (C) declare, authorize, set aside make or pay any dividend or other distribution (whether in cash, its capital stock or other property) or (D) enter into any agreement with respect to the voting of any equity of Seller;
(iv) (A) merge or consolidate with any other Personpurchase, redeem, otherwise acquire any business of its capital stock or assets of any other Person (whether by merger, stock purchase, asset purchase or other business combination), other than the purchase of supplies in the Ordinary Course of Business or (B) form any new Subsidiary;
(v) (A) materially change the operation of the Business, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of business;
(vi) make any loans, advances or capital contributions to(except as authorized by Sections 2.2, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of Business2.3 and 2.5 hereof);
(viim) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) Not grant any severance stock or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause)options under the Management Plans;
(viiin) transferNot allow any substantial negotiations by the officers, leaseemployees, licenseor agents (if such agents are acting pursuant to the direction of such officers or employees) of Transtar or the Transtar Companies concerning any agreement, guaranteeunderstanding, sellor arrangement concerning the sale, mortgage, pledge, dispose of or incur any Lien on or otherwise encumber any Assets, other than in the Ordinary Course of Business;
(ix) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee transfer or other similar official with respect to Sellerdisposition, (C) an assignment for the benefit of creditors either directly or an admission in writing indirectly, of the inability stock of Seller to pay its debts as they become due, Transtar or (D) any other thing under any applicable Law relating to bankruptcy Transtar Company or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur any Indebtedness or issue any debt securities or warrants or other rights to acquire debt securities of Seller or assume, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person for Indebtedness or capital obligations, in the case of any of the foregoing;
(xii) cancel any debts owed to or claims held by Seller in excess of $35,000;
(xiii) abandon, disclaim, dedicate to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreement;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;
(xv) revalue any substantially all of the assets of the Seller, except as required by GAAP, Transtar or a Transtar Company.
(o) Not enter into, modify, amend, supplement or permit terminate any binding agreement or contract with any affiliate of Holdings or USX (other than the Transtar Companies), except in the ordinary course of business, consistent with past practice.
(p) Not agree to any material change in any insurance policy, including, but not limited to, any change which would impair Transtar's, or any of the assets of Transtar Companies', rights to extend the Seller to become bound by discovery period for claims made against any Contract that is or would constitute a Material Contract;claims made insurance policies.
(xviq) (A) change any method of accounting Not authorize or accounting practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Business;
(xvii) make, revoke or change any Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date;
(xviii) modify, amend or terminate (other than pursuant to the expiration of its term other than as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunder;
(xix) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property;
(xx) commence, settle or compromise any Proceeding;
(xxi) cancel, materially reduce or fail to maintain any insurance policy;
(xxii) change or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;
(xxiii) engage in any transaction agree with any Related Parties; or
person nor make any commitment to do any of (xxivc) authorize or enter into any agreement, commitment or understanding through (whether written or oralp) with respect to the foregoingabove.
Appears in 1 contract
Sources: Reorganization and Exchange Agreement (Transtar Holdings Lp)
Interim Operations. Except as (ai) From Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, conditioned or delayed or (ii) otherwise expressly contemplated by this Agreement, after the date hereof until and prior to the earlier of the Closing or termination of this AgreementClosing, Seller shall shall, (ix) operate conduct the Business only in the Ordinary Course of Businessordinary course consistent with past practice, including maintaining appropriate service levels, and in compliance with applicable Law including any COVID-19 Measures; and (iiy) use its commercially reasonable efforts to (A) maintain and preserve the Business organization intact the business organization and goodwill of and, with respect to the Business, the Assets maintain existing relations and the Assumed Liabilitiesgoodwill with all Governmental Authorities, (B) maintain satisfactory relationships with Seller’s clientscustomers, operatorssuppliers, distributors, customerscreditors, insurance underwriters lessors, employees and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits associates and (Eiii) maintain good relations with, and use its commercially reasonable efforts to keep available the services of, of the Business Employees.
(b) . Without limiting the generality of the foregoingforegoing and in furtherance thereof, except as set forth (a) Buyer shall otherwise approve in Section 5.1(bwriting, such approval not to be unreasonably withheld or delayed or (b) of the Disclosure Schedule, as otherwise expressly permitted contemplated by this Agreement or as approved in writing by ▇▇▇▇▇, from the date hereof until the earlier of the Closing or the termination of this Agreement, after the date hereof, Seller shall not take any action which would require disclosure on Section 2.8 of the Disclosure Schedule ornot:
(ia) take directly or omit to take indirectly sell, transfer, pledge, distribute, create any action that results Liens on the Acquired Assets (other than Permitted Liens) or may reasonably be expected to result otherwise dispose of any Acquired Assets, except for the sale of products or services in any of the representations and warranties of Seller or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfiedOrdinary Course;
(iib) amend or otherwise change the organizational documents of Seller’s Organizational Documents;
(iii) (A) authorize, issue, sell or transfer any membership interests or other securities of Seller, (B) adjust, split, combine or reclassify or otherwise amend the terms of any membership interest or other security of Seller, (C) declare, authorize, set aside make or pay any dividend or other distribution (whether in cash, stock or other property) or (D) enter into any agreement with respect to the voting of any equity of Seller;
(iv) (Ac) merge or consolidate with any other Person;
(d) with respect to the Business, acquire make (or revoke) or otherwise change any material election with respect to Taxes, enter into a closing agreement or other agreement with any Governmental Authority with respect to Taxes, consent to an extension or waiver of the statute of limitations applicable to any Tax claim or assessment, or take any other similar action;
(e) discontinue any business material to the Business;
(f) amend or assets terminate, or waive, release or assign any rights or claims with respect to, any Assumed Contract or Permit of any other Person (whether by merger, stock purchase, asset purchase or other business combination), the Business other than the purchase of supplies in the Ordinary Course of Business or (B) form any new SubsidiaryCourse;
(vg) settle, or consent to any settlement of, any material Action or enter into any consent decree, with regard to any Action related to the Business;
(Ah) materially change enter into any Contract relating to the operation Business that would be a Material Contract of the Business, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or ;
(Bi) enter into a new line any Contract with any Related Party or Affiliate of business or abandon or discontinue an existing line of businessSeller;
(vij) make any loansincrease the salary, advances wages or capital contributions toother compensation or benefits of, or investments in, any Person terminate (other than advances of expenses to Business Employees in for cause) or reduce by more than 50% the Ordinary Course of Business);
(vii) (A) institute or announce any increase in the compensationhours worked by, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for causeas required by Law or the terms of any Company Benefit Plan in effect on the date hereof);
(viiik) transfergrant any severance rights or any retention, leasechange in control, licenseannual or other bonus (whether monetary or otherwise) or advance (excluding advances for ordinary business expenses in the Ordinary Course) to any Business Employee;
(l) abandon, guaranteefail to maintain, sellsurrender, mortgage, pledge, dispose of or incur any Lien on cancel or otherwise encumber annul, or grant any Assetsrights, waivers or covenants not to ▇▇▇ with respect to any Acquired IPR, other than in the Ordinary Course of Business;Course; or
(ix) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(xm) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as take any of the foregoing (A) through (C);
(xi) incur any Indebtedness or issue any debt securities or warrants or other rights to acquire debt securities of Seller or assume, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person for Indebtedness or capital obligations, in the case of any of the foregoing;
(xii) cancel any debts owed to or claims held by Seller in excess of $35,000;
(xiii) abandon, disclaim, dedicate to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreement;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;
(xv) revalue any of the assets of the Seller, except as required by GAAP, or enter into, or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contract;
(xvi) (A) change any method of accounting or accounting practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Business;
(xvii) make, revoke or change any Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date;
(xviii) modify, amend or terminate (other than pursuant to the expiration of its term other than as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunder;
(xix) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property;
(xx) commence, settle or compromise any Proceeding;
(xxi) cancel, materially reduce or fail to maintain any insurance policy;
(xxii) change or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;
(xxiii) engage in any transaction with any Related Parties; or
(xxiv) authorize or enter into any agreement, commitment or understanding (whether written or oral) with respect to the foregoingactions.
Appears in 1 contract
Interim Operations. (a) From the date hereof until the earlier of the Closing Except as required by applicable Law or termination of as expressly provided by this Agreement, Seller the Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time, the business of it and its Subsidiaries shall (i) operate the Business only be conducted in all material respects in the Ordinary Course of Business, including maintaining appropriate service levels, ordinary and in compliance with applicable Law including any COVID-19 Measures; usual course and (ii) it and its Subsidiaries shall use their respective commercially reasonable efforts to (A) preserve the material components of their business organizations intact and maintain and preserve intact the business organization existing relations and goodwill of the Businesswith Governmental Entities, the Assets and the Assumed Liabilitiesmaterial customers, (B) maintain satisfactory relationships with Seller’s clientsmaterial suppliers, operatorslicensors, licensees, distributors, customerscreditors and lessors, insurance underwriters key employees and other third parties having independent contractors, and material service providers, agents and business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, associates and keep available the services ofof its and its Subsidiaries’ present officers and key employees; provided, however, that the Business Employees.
(b) Company and its Subsidiaries shall be under no obligation to and shall not, without Parent’s prior written consent, put in place any new retention programs or include additional personnel in any existing retention programs. Without limiting the generality of the foregoingimmediately preceding sentence, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) with the prior written consent of Parent or (C) as set forth in Section 5.1(b) 6.1 of the Company Disclosure Schedule, as expressly permitted by this Agreement or as approved in writing by ▇▇▇▇▇, from the date hereof until the earlier of the Closing or the termination of this Agreement, Seller shall Company will not take any action which would require disclosure on Section 2.8 of the Disclosure Schedule orand will not permit its Subsidiaries to:
(i) take adopt or omit propose any change or amendment (whether by merger, consolidation or otherwise) to take its certificate of incorporation or bylaws or other applicable governing instruments of the Company and its Subsidiaries;
(ii) merge or consolidate the Company or any action of its Subsidiaries with any other Person, except for any such transactions solely among wholly owned Subsidiaries of the Company not in violation of any instrument binding on the Company or any of its Subsidiaries and that results or may would not reasonably be expected to result in any a material increase in the net Tax liability of the representations Company and warranties of Seller or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfied;
(ii) amend or otherwise change the organizational documents of Sellerits Subsidiaries, taken as a whole;
(iii) acquire, directly or indirectly, whether by purchase, merger, consolidation or acquisition of stock or assets or otherwise, any assets, securities, properties, interests, or businesses or make any investment (whether by purchase of stock or securities, contributions to capital, loans to, or property transfers), in each case, other than (A) authorizeacquisitions of raw materials, supplies, equipment, inventory, third party Software and capital in the ordinary course of business consistent with past practice (it being understood and agreed that the acquisition of all or substantially all of the assets of any Person is not in the ordinary course of business), or (B) acquisitions with a value or purchase price (including the value of assumed liabilities) not in excess of $100,000 in any transaction or related series of transactions or $300,000 in the aggregate, or as required by the terms of Contracts as in effect as of the date of this Agreement that are listed in Section 6.1(a)(iii) of the Company Disclosure Schedule;
(iv) issue, sell sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any (A) shares of capital stock of the Company or any of its Subsidiaries (other than (1) the issuance, sale, pledge, disposition, grant, transfer, lease, license, guaranty or encumbrance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or (2) the issuance or transfer any membership interests or other securities of SellerShares pursuant to awards outstanding as of the date of this Agreement under, and as required by the terms of the Stock Plans as in effect as of the date of this Agreement), (B) adjustsecurities convertible into or exercisable, splitexchangeable or redeemable for any shares of such capital stock, combine any options, warrants or reclassify or otherwise amend the terms other rights of any membership interest kind to acquire any shares of such capital stock or other security of Sellersuch convertible, exercisable, exchangeable or redeemable securities, or (C) any Voting Debt;
(v) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly owned Subsidiary of the Company) in excess of $100,000 in any transaction or series of related transactions or $200,000 in the aggregate;
(vi) amend, supplement, replace, refinance, terminate or otherwise modify that certain Amended and Restated Credit Agreement dated as of December 6, 2012, by and among the Company, Bank of America, N.A., as administrative agent, and the lenders named therein (as amended on June 26, 2013 and July 3, 2014 and as such agreement may be further amended, amended and restated, supplemented, extended, refinanced, renewed, replaced or otherwise modified from time to time);
(vii) except with respect to the regular quarterly dividend of $0.13 per share payable on October 15, 2014, declare, authorize, set aside aside, make or pay any dividend or other distribution (whether distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for dividends paid by any Subsidiary of the Company to the Company or other propertyto a wholly owned Subsidiary of the Company) or (D) enter into any agreement Contract with respect to the voting of any equity of Seller;
(iv) (A) merge or consolidate with any other Person, acquire any business or assets of any other Person (whether by merger, stock purchase, asset purchase or other business combination), other than the purchase of supplies in the Ordinary Course of Business or (B) form any new Subsidiary;
(v) (A) materially change the operation of the Business, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of business;
(vi) make any loans, advances or its capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of Business);
(vii) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause)stock;
(viii) transferadjust, leasereclassify, licensesplit, guaranteecombine or subdivide, sellredeem, mortgage, pledge, dispose of or incur any Lien on purchase or otherwise encumber acquire, directly or indirectly, any Assets, other than in the Ordinary Course of Businessits capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock;
(ix) acquire incur, alter, amend or modify any real property indebtedness or undertake or commit to undertake capital expenditures for the purchase guarantee indebtedness of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become dueanother Person, or (D) any other thing under any applicable Law relating to bankruptcy issue or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur any Indebtedness or issue sell any debt securities or warrants or other rights to acquire any debt securities security of Seller the Company or assumeany of its Subsidiaries, guarantee except for the incurrence of indebtedness for borrowed money incurred in the ordinary course of business consistent with past practice not to exceed $200,000 in the aggregate;
(x) make or endorseauthorize any capital expenditures materially in excess of the amount reflected in the Company’s capital expenditure budget attached to Section 6.1(a)(x) of the Company Disclosure Schedule;
(xi) make any material changes with respect to accounting policies or procedures, except as an accommodation required by changes in applicable GAAP;
(xii) subject to Section 6.11, release, assign, compromise, discharge, waive, settle or satisfy any Action (including any Action relating to this Agreement, the Offer or the Merger) or other rights, claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) for an amount not covered by insurance in excess of $100,000 individually or $200,000 in the aggregate or providing for any relief other than monetary relief (except for confidentiality, non-disparagement, releases, agreements not to ▇▇▇ and other similar provisions in a settlement agreement);
(xiii) amend or modify, in any material respect, or terminate any Material Contract, material lease for Leased Real Property or material Company Permit or enter into any Contract that would have been a Material Contract had it been entered into prior to the obligations execution of this Agreement, in each case other than in the ordinary course of business;
(xiv) other than in the ordinary course of business or to the extent required by law, make any material Tax election, amend any Tax Return with respect to a material amount of Taxes, settle or finally resolve any controversy with respect to a material amount of Taxes or change any method of Tax accounting;
(xv) (A) with regard to Intellectual Property, transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Person for Indebtedness material Intellectual Property, other than non-exclusive licenses granted in the ordinary course of business; and (B) with regard to other assets, transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon, create or capital obligationsincur any Lien (other than Permitted Encumbrances) on or allow to lapse or expire or otherwise dispose of any material assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, except, with respect to the foregoing clause (B), (x) in connection with sales of Company products or dispositions of inventory in the ordinary course of business (y) sales or other dispositions of obsolete assets or (z) sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $100,000 in any transaction or series of related transactions or $300,000 in the aggregate (inclusive of any sales or dispositions made pursuant to clauses (x) or (y) of this paragraph);
(xvi) terminate any executive officers or hire any new employees unless such hiring is in the ordinary course of business consistent with past practice;
(xvii) adopt, enter into, amend, terminate or extend any Collective Bargaining Agreement;
(xviii) except as required pursuant to existing written, binding agreements in effect prior to the date of this Agreement, or as otherwise required by applicable Law, (A) grant or provide any severance or termination payments or benefits to any director, officer or, other than in the ordinary course of business, employees (who are not officers) of the Company or any of its Subsidiaries, (B) increase the compensation, bonus or pension, welfare, severance, change-in-control or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or, other than in the ordinary course of business consistent with past practice, non-officer employee of the Company or any of its Subsidiaries other than, in the case of non-officer employees, base salary increases or spot or other bonuses awarded in the ordinary course of business (which spot or other bonuses shall not exceed $20,000 in the aggregate), (C) establish, adopt, amend or terminate any Company Benefit Plan (except as required by Law) or amend the terms of any outstanding equity-based awards, (D) take any action to accelerate the foregoing;
(xii) cancel vesting or payment, or fund or in any debts owed to other way secure the payment, of compensation or claims held by Seller in excess of $35,000;
(xiii) abandonbenefits under any Company Benefit Plan, disclaim, dedicate to the publicextent not already provided in any such Company Benefit Plan, sell, assign (E) materially change any actuarial or grant any security interest in, other assumptions used to or under any Business Intellectual Property or Business IP Agreement;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property calculate funding obligations with respect to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof Company Benefit Plan or to other contractors or representatives of Seller who are similarly subject change the manner in which contributions to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with plans are made or the Seller;
(xv) revalue any of the assets of the Sellerbasis on which such contributions are determined, except as may be required by GAAP, or enter into(F) forgive any loans to directors, officers or permit key employees of the Company or any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contract;
(xvi) (A) change any method of accounting or accounting practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Business;
(xvii) make, revoke or change any Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date;
(xviii) modify, amend or terminate (other than pursuant to the expiration of its term other than as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunderSubsidiaries;
(xix) fail to pay unless required by applicable Law, reclassify any required maintenance independent contractor as an employee of the Company or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Propertyits Subsidiaries;
(xx) commencefail to use commercially reasonable efforts to renew or maintain the Insurance Policies or comparable replacement policies, settle or compromise any Proceedingother than in the ordinary course of business consistent with past practice;
(xxi) cancel, materially reduce or fail to maintain enter into any insurance policynew line of business;
(xxii) change adopt, enter into or modify the Seller’s crediteffect any plan of complete or partial liquidation, collectiondissolution, reorganization or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respectrestructuring;
(xxiii) engage take any action that would, or would be reasonably likely to, individually or in any transaction with any Related Partiesthe aggregate, prevent, materially delay or materially impede the consummation of the Offer, the Merger or the other transactions contemplated by this Agreement; or
(xxiv) authorize agree, authorize, propose, commit or enter into announce an intention to do any agreement, commitment or understanding (whether written or oral) with respect to of the foregoing.
(b) Nothing contained herein shall give to Parent or Purchaser, directly or indirectly, rights to control or direct the Company’s operations prior to the Effective Time in violation of applicable Law. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions hereof, complete control and supervision of its operations and shall not be required to obtain consent of Parent if it reasonably believes that doing so would violate applicable Law.
Appears in 1 contract
Sources: Merger Agreement (Einstein Noah Restaurant Group Inc)
Interim Operations. (a) From Unless the Purchaser otherwise agrees in writing and except as otherwise expressly contemplated by this Agreement (including Section 5.14 hereof), between the date hereof until the earlier of the Closing or termination of this AgreementAgreement and the Closing, the Seller shall will cause the Company to (i) operate conduct the Business only in the Ordinary Course of Business, including maintaining appropriate service levels, ordinary course and in compliance consistent with applicable Law including any COVID-19 Measurespast practice; and (ii) use commercially reasonable best efforts to preserve and maintain its properties and the current relationships of the Company with its customers, suppliers, distributors, agents, officers and employees and other persons with which the Company has significant business relationships; (Aiii) use reasonable best efforts to maintain all of the assets owned or used by the Business in the ordinary course of business consistent with past practice; (iv) continue capital expenditures in accordance with the timing and amounts forecast for capital expenditures as set forth on Exhibit 5.02
(a) hereto; (v) maintain insurance in full force and effect with respect to the Business with responsible companies, comparable in amount, scope and coverage to that in effect on the date of this Agreement; (vi) use reasonable best efforts to preserve intact the business organization goodwill and goodwill ongoing operations of the Business, the Assets and the Assumed Liabilities, ; (Bvii) maintain satisfactory relationships the Books and Records in the usual, regular and ordinary manner, on the basis consistent with Seller’s clients, operators, distributors, customers, insurance underwriters prior years; and other third parties having business dealings with Seller, (Cviii) pay its debts perform and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, comply in all material respects, other respects with their obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available under the services of, the Business EmployeesCommitments.
(b) Without limiting Except as expressly contemplated by this Agreement, between the generality date of this Agreement and the Closing, the Seller will cause the Company not to do any of the foregoingfollowing without the prior written consent of the Purchaser:
(i) create any Encumbrance on any properties or assets (whether tangible or intangible) of the Company;
(A) except for inventory in the ordinary course of business sell, assign, transfer, lease or otherwise dispose of or agree to sell, assign, transfer, lease or otherwise dispose of any assets of the Company or (B) cancel any indebtedness owed to the Company;
(iii) acquire (by merger, consolidation, or acquisition of stock or assets) any Person;
(iv) (A) issue any debt securities, (B) incur any additional indebtedness (other than Existing Indebtedness), (C) assume, grant, guarantee or endorse, or make any other accommodation or arrangement making the Company responsible for, the Liabilities of any other Person or (D) make any loans, advances or capital contributions to, or investments in any Person;
(v) change any method of accounting or accounting practice used by the Company, other than such changes required by U.S. GAAP and changes of tax accounting methods to the extent the Code requires conformity of financial and tax accounting methods; provided that the Seller shall give the Purchaser prompt written notice of any such change;
(vi) (A) enter into or adopt or amend any existing agreement or arrangement relating to severance, (B) enter into or adopt or amend any existing severance plan, (C) enter into or adopt or amend any Company Employee Plan or Employee Agreement (including, without limitation, the plans, programs, agreements and arrangements referred to in Section 3.22) or (D) grant any increases in compensation, except compensation increases associated with promotions and annual reviews in the ordinary course of business and the payment of bonuses to the individuals in the amounts listed on Exhibit 5.02(b)(vi) hereto;
(vii) make, revoke or change any Tax election, compromise or settle any federal, state, local, foreign or other Tax liability or make any payment under any Tax sharing, allocation or indemnity agreement;
(viii) accelerate or delay the purchase of raw materials, the manufacture, shipment or sale of inventory, the collection of accounts or notes receivable or the payment of accounts or notes payable or accrued liabilities or expenses or otherwise operate the Business, in each case, in a manner that would be inconsistent with past practices or the forecast of inventory, accounts and notes receivable, accounts and notes payable and accrued liabilities and expenses previously provided to the Purchaser and attached hereto as Exhibit 5.02(b)(viii);
(ix) except as set forth in Section 5.1(bSchedule 5.02(b)(ix) engage in any transaction with the Seller or any of the Disclosure Schedule, as expressly permitted by this Agreement or as approved in writing by ▇▇▇▇▇, from the date hereof until the earlier of the Closing or the termination of this Agreement, Seller shall not take any action which would require disclosure on Section 2.8 of the Disclosure Schedule or:his Affiliates;
(ix) take enter into, modify, terminate, amend or omit to take grant any action that results or may reasonably be expected to result waiver in respect of any Commitment;
(xi) allow the lapse of any of the representations and warranties Company's rights of Seller ownership or the Beneficial Owners set forth herein being or becoming untrue in use of any material respect or in any of the conditions set forth herein not being satisfiedIntellectual Property right;
(iixii) amend repurchase, redeem or otherwise change acquire or exchange any share of Common Stock, issue or sell any additional shares of the organizational documents capital stock of, or other equity interests in, the Company, or securities convertible into or exchangeable for such shares or equity interests, or issue or grant any options, warrants, calls, subscription rights or other rights of Sellerany kind to acquire additional shares of such capital stock, such other equity interests or such securities;
(iiixiii) (A) authorize, issue, sell or transfer any membership interests or other securities of Seller, (B) adjust, split, combine or reclassify or otherwise amend the terms Company's articles of any membership interest incorporation or other security of Seller, bylaws or equivalent organization documents;
(Cxiv) declare, authorizeset aside, set aside make or pay any dividend or other distribution (whether in cash, stock or other property) or (D) enter into any agreement with respect to the voting of any equity of Seller;
(iv) (A) merge or consolidate with any other Person, acquire any business or assets of any other Person (whether by merger, stock purchase, asset purchase or other business combination), other than the purchase of supplies in the Ordinary Course of Business or (B) form any new Subsidiary;
(v) (A) materially change the operation of the Business, Assets or the Assumed Liabilities property or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of business;
(vi) make any loans, advances or capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of Businesscombination thereof);
(vii) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on or otherwise encumber any Assets, other than in the Ordinary Course of Business;
(ix) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur any Indebtedness or issue any debt securities or warrants or other rights to acquire debt securities of Seller or assume, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person for Indebtedness or capital obligations, in the case of any of the foregoing;
(xii) cancel any debts owed to or claims held by Seller in excess of $35,000;
(xiii) abandon, disclaim, dedicate to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreement;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;; or
(xv) revalue take any action that is reasonably likely to result in the representations and warranties set forth in Articles III becoming false or inaccurate in any material respect as of the assets of the Seller, except as required by GAAP, or enter into, or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contract;Closing Date; or
(xvi) (A) change agree to take any method of accounting or accounting practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records actions specified in the Ordinary Course of Business;
(xvii) make, revoke or change any Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date;
(xviii) modify, amend or terminate (other than pursuant to the expiration of its term other than as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunder;
(xix) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property;
(xx) commence, settle or compromise any Proceeding;
(xxi) cancel, materially reduce or fail to maintain any insurance policy;
(xxii) change or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;
(xxiii) engage in any transaction with any Related Parties; or
(xxiv) authorize or enter into any agreement, commitment or understanding (whether written or oral) with respect to the foregoingthis Section 5.02(b).
Appears in 1 contract
Interim Operations. (a) From the date hereof until the earlier With respect to operations of the Closing or termination Assets during the period between the execution of this AgreementAgreement and the Closing Date (the “Interim Period”), Seller covenants that it shall (i) operate to the Business only extent within the control of Seller, cause the Assets to be maintained and operated in the Ordinary Course of Businessordinary course, including maintaining appropriate service levels, and in compliance consistent with applicable Law including any COVID-19 Measurespast practices; and (ii) use commercially reasonable efforts provide notice of any AFE copies received by Seller for any operations involving Seller commitments of less than $100,000, net to Seller’s interest; (iii) obtain Buyer’s prior written approval prior to consenting to (A) maintain any workover designed to change the existing completion interval with respect to any Well, and preserve intact the business organization and goodwill of the Business, the Assets and the Assumed Liabilities, (B) maintain satisfactory relationships with any future expenditures and proposed contracts and agreements relating to the Assets that involve individual commitments of $100,000 or more, net to Seller’s clientsinterest; (iv) obtain Buyer’s prior written approval prior to, operatorsby action or inaction, distributorsgoing non-consent on any proposal made pursuant to any joint operating or similar agreement affecting the Assets; and (v) obtain Buyer’s written approval before voting under any operating, customersunit, insurance underwriters and other third parties having business dealings with Sellerjoint venture, or similar agreement; provided, however, that Buyer will not unreasonably withhold or delay a determination on any such approval under (iii), (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services of, the Business Employees.
(b) Without limiting the generality of the foregoing, except as set forth in Section 5.1(b) of the Disclosure Schedule, as expressly permitted by this Agreement or as approved in writing by ▇▇▇▇▇, from the date hereof until the earlier of the Closing or the termination of this Agreement, Seller shall not take any action which would require disclosure on Section 2.8 of the Disclosure Schedule or:
(i) take or omit to take any action that results or may reasonably be expected to result in any of the representations and warranties of Seller or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfied;
(ii) amend or otherwise change the organizational documents of Seller;
(iii) (A) authorize, issue, sell or transfer any membership interests or other securities of Seller, (B) adjust, split, combine or reclassify or otherwise amend the terms of any membership interest or other security of Seller, (C) declare, authorize, set aside make or pay any dividend or other distribution (whether in cash, stock or other propertyiv) or (Dv) above. Furthermore, during the Interim Period, Seller will not, without the prior written consent of Buyer, (a) enter into any agreement or arrangement transferring, selling, or encumbering any of the Assets, other than sales of current production or products in the ordinary course of business and dispositions in the ordinary course of business of any item of personal property or equipment having a value of less than $50,000 and that is promptly replaced with similar property or equipment of equal or greater value and utility; (b) grant any Preferential Right or other similar right to purchase any Assets; or (c) enter into, terminate or amend any Material Contract relating to the Assets, including entering into any new production sales contract extending beyond the Closing Date and not terminable on sixty (60) days’ notice or less; or (d) commit to do any of the foregoing. Notwithstanding the forgoing, in the face of serious risk to life, property, or the environment, Seller may take, or consent to, such action as a prudent operator, or non-operator, as the case may be, would take without obtaining Buyer’s prior consent. Seller shall notify Buyer of any emergency action taken, and to the extent reasonably practicable, obtain Buyer’s prior approval of such actions. However, except for emergency action that must be taken in the face of serious risk to life, property, or the environment, Seller has no obligation to undertake any actions with respect to the voting of any equity of Seller;
(iv) (A) merge or consolidate with any other Person, acquire any business or assets of any other Person (whether by merger, stock purchase, asset purchase or other business combination), other than the purchase of supplies Assets that are not required in the Ordinary Course course of Business or (B) form any new Subsidiary;
(v) (A) materially change the normal operation of the Business, Assets or Assets. To the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or extent that Seller is not the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of business;
(vi) make any loans, advances or capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of Business);
(vii) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on or otherwise encumber any Assets, other than in the Ordinary Course of Business;
(ix) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment operator of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing portion of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur any Indebtedness or issue any debt securities or warrants or other rights to acquire debt securities of Seller or assume, guarantee or endorse, as an accommodation or otherwiseAssets, the obligations of Seller in Section 12.1 concerning operations or activities that normally, or pursuant to existing contracts are carried out or performed by the operator, shall be construed to require only that Seller use all reasonable efforts (without being obligated to incur any Person for Indebtedness expense or capital obligations, in institute any cause of action) to cause the case operator of any such portion of the foregoing;
(xii) cancel any debts owed Assets to take such actions or claims held by Seller in excess of $35,000;
(xiii) abandon, disclaim, dedicate to render such performance within the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreement;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;
(xv) revalue any constraints of the assets of the Seller, except as required by GAAP, or enter into, or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contract;
(xvi) (A) change any method of accounting or accounting practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Business;
(xvii) make, revoke or change any Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date;
(xviii) modify, amend or terminate (other than pursuant to the expiration of its term other than as a result of any action taken by Seller, operating or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunder;
(xix) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property;
(xx) commence, settle or compromise any Proceeding;
(xxi) cancel, materially reduce or fail to maintain any insurance policy;
(xxii) change or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;
(xxiii) engage in any transaction with any Related Parties; or
(xxiv) authorize or enter into any agreement, commitment or understanding (whether written or oral) with respect to the foregoingagreements.
Appears in 1 contract
Sources: Purchase and Sale Agreement (Tetra Technologies Inc)
Interim Operations. (a) From the date hereof until the earlier of the Closing Except as required by applicable Law or termination of as expressly contemplated by this Agreement, Seller the Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time, the business of it and its Subsidiaries shall (i) operate the Business only be conducted in all material respects in the Ordinary Course of Businessordinary and usual course and, including maintaining appropriate service levelsto the extent consistent therewith, it and in compliance with applicable Law including any COVID-19 Measures; and (ii) its Subsidiaries shall use their respective commercially reasonable efforts to (A) preserve their business organizations intact and maintain and preserve intact the business organization existing relations and goodwill of the Businesswith Governmental Entities, the Assets and the Assumed Liabilitiescustomers, (B) maintain satisfactory relationships with Seller’s clientssuppliers, operatorslicensors, licensees, distributors, customerscreditors, insurance underwriters lessors, employees and business associates (other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject than as announced by the Company prior to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services of, the Business Employees.
(b) date hereof). Without limiting the generality of of, and in furtherance of, the foregoing, from the date of this Agreement until the Effective Time, except (A) as set forth in Section 5.1(b) of the Disclosure Schedule, as otherwise expressly required or permitted by this Agreement or as approved required by Law, (B) as Parent may approve in writing by ▇▇▇▇▇, from the date hereof until the earlier (such approval not to be unreasonably withheld or delayed) or (C) as set forth in Section 6.1 of the Closing or Company Disclosure Schedule, the termination of this Agreement, Seller shall Company will not take any action which would require disclosure on Section 2.8 of the Disclosure Schedule orand will not permit its Subsidiaries to:
(i) take adopt or omit to take propose any action that results change in its certificate of incorporation or may reasonably be expected to result in any of the representations and warranties of Seller by-laws or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfiedother applicable governing instruments;
(ii) amend merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or other than in the ordinary course restructure, reorganize or completely or partially liquidate or otherwise change enter into any Contracts imposing material changes or restrictions on its assets, operations or businesses, other than in the organizational documents of Sellerordinary course;
(iii) acquire, directly or indirectly, whether by purchase, merger, consolidation or acquisition of stock or assets or otherwise, any assets, securities, properties, interests, or businesses or make any investment (whether by purchase of stock or securities, contributions to capital, loans to, or property transfers), in each case, other than (A) authorizein the ordinary course of business (it being understood and agreed that the acquisition of all or substantially all of the assets of any Person is not in the ordinary course of business), issue, sell or transfer any membership interests or other securities of Seller, (B) adjustif not in the ordinary course of business, split, combine with a value or reclassify purchase price (including the value of assumed liabilities) not in excess of $50 million in any transaction or otherwise amend related series of transactions or acquisitions pursuant to Contracts in effect as of the terms date of any membership interest or other security this Agreement and listed on Section 6.1 of Seller, the Company Disclosure Schedule (C) declare, authorize, set aside make or pay any dividend or other distribution (whether in cash, stock or other property) or (D) enter into any agreement with respect it being understood that capital expenditures are not meant to the voting of any equity of Sellerbe captured by this Section 6.1(a)(iii));
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (A) merge or consolidate with any other Person, acquire any business or assets of any other Person (whether by merger, stock purchase, asset purchase or other business combination), other than the purchase issuances, sales, pledges, dispositions, grants, transfers, leases, licenses, guaranties or encumbrances of supplies in shares by a wholly owned Subsidiary of the Ordinary Course Company to the Company or another wholly owned Subsidiary or the issuance or transfer of Business Shares pursuant to outstanding awards under Company Stock Plans), or (B) form securities convertible or exchangeable into or exercisable for any new Subsidiaryshares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur (A) materially change any lien or other security interest on any Company Intellectual Property owned or exclusively licensed or that is material and non-exclusively licensed by the operation of the Business, Assets or the Assumed Liabilities Company or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement its Subsidiaries or (B) enter into any Lien on any other assets of the Company or any of its Subsidiaries having a new line value in excess of business or abandon or discontinue an existing line of business$50 million;
(vi) make any loans, advances advances, guarantees or capital contributions to, to or investments in, in any Person (other than advances the Company or any direct or indirect wholly owned Subsidiary of expenses to Business Employees the Company) in the Ordinary Course excess of Business);
(vii) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on or otherwise encumber any Assets, other than in the Ordinary Course of Business;
(ix) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 10 million in the aggregate;
(xvii) agree todeclare, request set aside, make or adopt (A) pay any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee dividend or other similar official distribution, payable in cash, stock, property or otherwise, with respect to Seller, any of its capital stock (C) an assignment except for dividends paid by any Subsidiary to the benefit of creditors Company or an admission in writing of the inability of Seller to pay its debts as they become dueany other Subsidiary, or (Dregular quarterly dividends not to exceed $0.37 per share, declared and paid consistent with prior timing) or enter into any other thing under any applicable Law relating Contract with respect to bankruptcy or insolvency with similar effect as any the voting of the foregoing (A) through (C)its capital stock;
(xiviii) incur reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any Indebtedness of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock;
(ix) incur, alter, amend or modify, any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt securities security of Seller the Company or assumeany of its Subsidiaries, or permit any Subsidiary of the Company to guarantee or endorseany indebtedness of the Company, as an accommodation or otherwise, the obligations of any Person for Indebtedness or capital obligations, other than in the case of any indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (A) that does not exceed $200 million in the aggregate, (B) debt of the foregoingCompany or a Subsidiary that is in replacement of existing indebtedness for borrowed money of the Company or such Subsidiary, as applicable, (C) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly owned Subsidiaries of the Company or (D) interest rate swaps on customary commercial terms consistent with past practice and in compliance with the Company’s risk management policies in effect on the date of this Agreement and not to exceed $500 million of notional debt in the aggregate;
(x) make or authorize any capital expenditure in excess of $875 million in the aggregate during any 12 month period;
(xi) other than in the ordinary course of business or in connection with an acquisition permitted under Section 6.1(a)(iii), enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement;
(xii) cancel make any debts owed material changes with respect to accounting policies or claims held procedures, except as required by Seller changes in excess of $35,000applicable generally accepted accounting principles;
(xiii) abandonsettle any Action before a Governmental Entity for an amount in the aggregate in excess of the amount set forth on Section 6.1(a)(xiii) of the Company Disclosure Schedule (excluding amounts covered by insurance) or for any obligation or liability of the Company in excess of such amount or agree to any material limitation or restriction on any aspect of the conduct of the Company’s or its Subsidiaries’ business (or, disclaim, dedicate after giving effect to the publicMerger, sell, assign Parent’s or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreementits Subsidiaries’ business);
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality in the ordinary course, amend or non-disclosure covenant protecting against further disclosure thereof modify, in any material respect, or to other contractors terminate any Material Contract or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the SellerIP Contract, or cancel, modify or waive any material debts or claims held by it or waive any material rights;
(xv) revalue any except as in Section 6.1(a)(xv) of the assets Company Disclosure Schedule, make any Tax election, amend any Tax Return, settle or finally resolve any controversy with respect to Taxes or change any method of Tax accounting in each case, where the Seller, except as required by GAAP, or enter into, or permit any sum of the assets amount of the Seller Taxes in question with respect to become bound by any Contract that is or would constitute a Material Contractall such actions exceeds $50 million;
(xvi) (A) change with regard to Intellectual Property owned by the Company or any method of accounting its Subsidiaries, transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, disclose, cancel, abandon or accounting practiceallow to lapse or expire or otherwise dispose of any material Intellectual Property, other than changes required under applicable Law licenses or GAAP other non-material Contracts granted in the ordinary course of business, or cancellation, abandonment, allowing to lapse or expire such Intellectual Property that is no longer used or useful in any of the Company’s or its Subsidiaries’ respective businesses or pursuant to Contracts in effect prior to the date of this Agreement; and (B) fail with regard to maintain other assets, transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any material assets, licenses, operations, rights, product lines, businesses or interests therein of the Seller’s booksCompany or its Subsidiaries, accounts and records including capital stock of any of its Subsidiaries, except in connection with services provided in the Ordinary Course ordinary course of Businessbusiness and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $50 million in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreement;
(xvii) makeexcept as required pursuant to existing written, revoke binding plans or agreements in effect prior to the date of this Agreement or as set forth in Section 5.1(h)(i) of the Company Disclosure Schedule, or as otherwise required by applicable Law, (A) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (B) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, in each case other than to non-officer employees in the ordinary course of business consistent with past practice, (C) establish, adopt, amend or terminate any Company Benefit Plan (except as required by Law) or amend the terms of any outstanding equity-based awards, (D) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Benefit Plan, to the extent not already provided in any such Company Benefit Plan, (E) materially change any Tax election actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by Seller that could adversely impact GAAP, or (F) forgive any loans to directors, officers or employees of the amount Company or any of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Dateits Subsidiaries;
(xviii) modifyagree, amend authorize or terminate commit to do any of the foregoing.
(other than pursuant b) Prior to making any widely distributed written communications to the expiration employees of the Company or any of its term other than as Subsidiaries pertaining to material compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall use its reasonable best efforts to provide Parent with a result copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication, and the Company shall consider such comments prior to distributing any such communication to its employees.
(c) Parent and Merger Sub (1) shall not take, and Parent shall not permit any of its Subsidiaries to take, any action taken by Seller, that is reasonably likely to prevent or other than as a result materially impair the consummation of a material breach by the counterparty theretoMerger and (2) any Contract currently in effect or termination release or assign any material rights or claims thereunder;
(xix) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property;
(xx) commence, settle or compromise any Proceeding;
(xxi) cancel, materially reduce or fail to maintain any insurance policy;
(xxii) change or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or shall not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;
(xxiii) engage in any transaction with any Related Parties; or
(xxiv) authorize or enter into any acquisition agreement, commitment or understanding make any acquisition, that is reasonably likely to prevent, materially delay or impair the consummation of the Merger. Parent shall not issue any Parent Common Stock (whether written or oral) subscription rights with respect thereto) prior to obtaining the Requisite Parent Vote unless the Stichting agrees to vote any Parent Common Stock received by it, or received by others who are bound to vote together with the Stichting, in favor of the proposal to approve the Merger and the other transactions contemplated hereby.
(d) Nothing contained herein shall give to Parent or Merger Sub, directly or indirectly, rights to control or direct the Company’s operations prior to the foregoingEffective Time in violation of applicable Law. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions hereof, complete control and supervision of its operations.
Appears in 1 contract
Interim Operations. Except with Purchaser’s prior written consent (a) From the date hereof until the earlier of the Closing not to be unreasonably withheld, conditioned or termination of this Agreementdelayed), Seller shall cause each of the Company and its Subsidiaries (i) operate the Business only to conduct its business in the Ordinary Course of Businessordinary course and, including maintaining appropriate service levelsto the extent consistent therewith, and in compliance with applicable Law including any COVID-19 Measures; and (ii) use its commercially reasonable efforts to (A) maintain and preserve intact the its business organization and goodwill of the Business, the Assets and the Assumed Liabilitiesorganizations intact, (B) maintain satisfactory relationships existing relations and goodwill with Seller’s clientsGovernmental Entities, operatorscustomers, suppliers, distributors, customerscreditors, insurance underwriters lessors, employees and other third parties having business dealings with Sellerassociates, and (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services of, of its present employees and agents; and (ii) not to (other than as set forth in the Business Employees.corresponding section of the Seller Disclosure Letter):
(a) amend its Organizational Documents;
(b) Without limiting the generality merge or consolidate with any other Person;
(c) acquire assets outside of the foregoingordinary course of business consistent with past practice from any other Person with a value or purchase price in the aggregate in excess of $50,000,000.00 or that would have any possibility of preventing or delaying the Closing beyond the Termination Date;
(d) issue, except as set forth in Section 5.1(b) sell, pledge, dispose of, grant, transfer, Encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or other Encumbrance of, any Equity Interests of the Disclosure Schedule, as expressly permitted by this Agreement Company or as approved in writing by ▇▇▇▇▇, from any of its Subsidiaries (other than the date hereof until the earlier issuance of the Closing or the termination of this Agreement, Seller shall not take any action which would require disclosure on Section 2.8 of the Disclosure Schedule or:
Equity Interests (i) take by a wholly-owned Subsidiary of the Company to the Company or omit another wholly-owned Subsidiary or (ii) by the Company to take Seller), securities convertible or exchangeable into, or exercisable for, any action that results Equity Interests or may reasonably be expected any options, warrants or other rights of any kind to result acquire any such Equity Interests or such convertible or exchangeable securities;
(e) create or incur any Encumbrance (other than a Permitted Encumbrance) on the assets of the Company or any of its Subsidiaries that, individually or in the aggregate, is material to the Company or any of its Subsidiaries;
(f) make any loans, advances, guarantees or capital contributions to or investments in any Person, other than (x) any of the representations and warranties of Seller foregoing to or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any on behalf of the conditions set forth herein Company or any direct or indirect wholly-owned Subsidiary of the Company, or (y) in the ordinary course of business consistent with past practice and which do not being satisfiedhave any possibility of preventing or delaying the Closing beyond the Termination Date;
(ii) amend or otherwise change the organizational documents of Seller;
(iii) (A) authorize, issue, sell or transfer any membership interests or other securities of Seller, (B) adjust, split, combine or reclassify or otherwise amend the terms of any membership interest or other security of Seller, (Cg) declare, authorizeset aside, set aside make or pay any dividend (i) cash distributions or dividends in any month that in the aggregate are in excess of the lesser of (A) $150,000,000.00 and (B) the amount of Free Cash Flow generated by the Company and its Subsidiaries for the preceding month, prorated for the month in which this Agreement is entered into, and for the month in which the Closing occurs; provided, that if distributions or dividends in respect of any month shall have been less than $150,000,000.00 as a result of the foregoing limitation or otherwise, Seller shall be entitled to make additional cash distributions at any time or from time to time up to an amount equal to the lesser of (x) Free Cash Flow for the period since the date of this Agreement and (y) the product of (A) $150,000,000.00 and (B) the number of whole and, without duplication, partial months in such period, or (ii) non-cash distributions or dividends, payable in stock, property or otherwise, with respect to any of its Equity Interests (except for non-cash distributions paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other distribution (whether in cash, stock direct or other propertyindirect wholly-owned Subsidiary) or (D) enter into any agreement with respect to the voting of any equity of Sellerits Equity Interests;
(ivh) (A) merge or consolidate with any other Person, acquire any business or assets of any other Person (whether by merger, stock purchase, asset purchase or other business combination), other than the purchase of supplies in the Ordinary Course of Business or (B) form any new Subsidiary;
(v) (A) materially change the operation of the Business, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of business;
(vi) make any loans, advances or capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of Business);
(vii) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on or otherwise encumber any Assets, other than in the Ordinary Course of Business;
(ix) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C);
(xii) incur any Indebtedness for borrowed money, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for Indebtedness incurred in the ordinary course of business consistent with past practice that is satisfied in full at or prior to the Closing, or (ii) amend, modify, supplement or waive the terms of any existing Indebtedness, debt securities or warrants or other rights to acquire debt securities of Seller the Company or assumeany of its Subsidiaries, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person for Indebtedness or capital obligations, except in the case ordinary course of any of the foregoingbusiness consistent with past practice;
(xiii) cancel except as contemplated by the capital budget set forth in the business plan set forth on Schedule 4.16 of the Seller Disclosure Letter, make or authorize any debts owed to payment of, or claims held by Seller accrual or commitment for, capital expenditures in excess of $35,00025,000,000.00 in the aggregate in any consecutive six-month period (or $50,000,000.00 in the event of an increase in data demand in the Business significantly in excess of the demand anticipated on the date hereof);
(xiiij) abandonamend, disclaimsupplement, dedicate to waive, terminate, assign, convey, encumber or otherwise transfer, in whole or in part, its rights or interests under or in any Material Contract, or enter into any Intercompany Contract or Company Contract that would be a Material Contract if in effect as of the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreementdate hereof;
(xivk) disclose enter into any confidential Intercompany Contract or proprietary information amend, modify or confidential Business Intellectual Property waive any Intercompany Contract in any manner that would result in the Company or its Subsidiaries paying to any Person, the other parties thereto aggregate consideration greater than employees that provided for in the copies of Seller that are subject Intercompany Contracts provided to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure Purchaser pursuant to a written agreement with the SellerSection 4.2(a)(v);
(xvl) revalue make any of the assets of the Sellerchanges with respect to material financial accounting policies or procedures, except as required by changes in GAAP, or enter into, or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contract;
(xvim) (Ai) enter into any line of business in any geographic area other than the current lines of business of the Company and its Subsidiaries and products and services reasonably ancillary thereto (including ancillary Internet services), including any current line of business and products and services reasonably ancillary thereto, in any geographic area for which the Company or any of its Subsidiaries currently holds a FCC License authorizing the conduct of such business, product or service in such geographic area, (ii) except as currently conducted, engage in the conduct of any business in any state that would require the receipt or transfer of a Communications License or any other License issued by any Governmental Entity authorizing operation or provision of any communication services or foreign country that would require the receipt or transfer of, or application for, a License to the extent such License would reasonably be expected to prevent, materially delay or materially impair the consummation of the Transaction, or (iii) enter into any business or operations outside of the United States;
(n) file for any Company License the receipt of which would reasonably be likely to prevent, materially impair or materially delay consummation of the Transaction;
(o) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $15,000,000.00;
(p) except to the extent otherwise required by Law, make or change any Tax election, change any method of Tax accounting or accounting practice, other than changes required under applicable Law settle or GAAP or (B) fail finally resolve any controversy with respect to maintain Taxes for an amount that materially exceeds the Seller’s books, accounts and records amount reserved with respect thereto in the Ordinary Course of Businessmost recent Financial Statements, in each case, if such action would have an adverse affect on the Company or Purchaser that is more than immaterial;
(xviiq) maketransfer, revoke sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or change allow to lapse or expire or otherwise dispose of (i) any Tax election by Seller Communications Licenses or wireless spectrum and (ii) except in the ordinary course of business consistent with past practice, any other Licenses, assets, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries that could adversely impact are material to the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date;
(xviii) modifyBusiness, amend or terminate (other than pursuant to Company Contracts in effect prior to the expiration of its term date hereof;
(r) other than as a result may be required by applicable Law or pursuant to the existing terms and conditions of any action taken by SellerBenefit Plan as in effect on the date hereof, (i) terminate, establish, adopt or amend any Benefit Plan other than as a the adoption of annual Benefit Plans in the ordinary course of business consistent with past practice and amendments to health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (ii) grant any salary or wage increase, other than to increase salary and wages for employees by no more than 4% in the aggregate in the ordinary course of a material breach by business consistent with past practice, (iii) pay aggregate bonus or incentive compensation other than in the counterparty theretoordinary course consistent with past practice, (iv) (x) grant any Contract currently new compensation award, other than bonus awards and cash-based long term incentive compensation awards, in effect or termination release or assign any material rights or claims thereunder;
(xix) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain each case in amounts and further prosecute any applications for registration on terms that are in the ordinary course of Owned Intellectual Property or otherwise abandonbusiness consistent with past practice; provided, let lapse or fail to protect any Owned Intellectual Property;
(xx) commencehowever, settle or compromise any Proceeding;
(xxi) cancel, materially reduce or fail to maintain any insurance policy;
(xxii) change or modify that no new awards shall be granted under the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;
(xxiii) engage in any transaction with any Related Parties; or
(xxiv) authorize or enter into any agreement, commitment or understanding (whether written or oral) with respect to the foregoing.Phantom Share Plan,
Appears in 1 contract
Sources: Stock Purchase Agreement
Interim Operations. The Company covenants and agrees that, except (i) as expressly contemplated by this Agreement, or (ii) as agreed in writing by Parent, after the date hereof, and prior to the earlier of (x) the termination of this Agreement in accordance with Article XI and (y) the Stock Purchase Closing Date, the Company shall, and shall cause each of its Subsidiaries (including for purposes of this Section 6.1 the Clubs) to:
(a) From conduct the date hereof until the earlier business, operations, activities and practices of the Closing or termination of this AgreementCompany and its Subsidiaries and the Club, Seller shall (i) operate the Business only respectively, in the Ordinary Course ordinary course of Business, including maintaining appropriate service levels, and in compliance business consistent with applicable Law including any COVID-19 Measures; and past practice;
(iib) use commercially its reasonable best efforts to (A) maintain and preserve intact the its present business organization intact and goodwill of the Business, the Assets and the Assumed Liabilities, (B) maintain satisfactory relationships relations with Seller’s clients, operators, distributors, customers, insurance underwriters employees, contractors, regulators and other third parties others having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services of, the Business Employees.it;
(bc) Without limiting the generality not amend its articles or certificates of the foregoingincorporation or bylaws or comparable governing instruments;
(d) not, except as set forth in Section 5.1(b) of the Disclosure Schedule, as expressly permitted by this Agreement or as approved in writing by ▇▇▇▇▇, from the date hereof until the earlier of the Closing or the termination of this Agreement, Seller shall not take any action which would require disclosure on Section 2.8 of the Disclosure Schedule or:
(i) take or omit except for (A) borrowing under Material Contracts (including, without limitation receivables purchase agreements) listed on Schedule 3.10(i), as in effect on the date hereof, and (B) additional borrowings from a recognized financial institution not involving the financing of VOI Receivables in a maximum amount of fifteen million dollars ($15,000,000.00) on terms that do not impose in relation to take any action that results or may reasonably be expected to result in any of the representations and warranties of Seller or the Beneficial Owners set forth herein sum being or becoming untrue in borrowed any material respect prepayment penalties, incur, or in assume or become subject to, whether directly, indirectly or by way of guarantee or otherwise, any of the conditions set forth herein not being satisfied;
indebtedness (long-term, short-term or otherwise) for borrowed money, (ii) amend assume, guarantee, endorse or otherwise change the organizational documents of Seller;
(iii) (A) authorize, issue, sell become liable or transfer any membership interests or other securities of Seller, (B) adjust, split, combine or reclassify or otherwise amend the terms of any membership interest or other security of Seller, (C) declare, authorize, set aside make or pay any dividend or other distribution responsible (whether in cashdirectly, stock contingently or other propertyotherwise) or (D) enter into any agreement with respect to for the voting obligations of any equity of Seller;
(iv) (A) merge or consolidate with any other Person, acquire any business or assets of any other Person (whether by merger, stock purchase, asset purchase or other business combination), other than the purchase of supplies in the Ordinary Course of Business ; or (B) form any new Subsidiary;
(v) (A) materially change the operation of the Business, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of business;
(viiii) make any loans, advances or capital contributions to, or investments in, any other Person (x) other than advances any wholly-owned Subsidiary of expenses to Business Employees the Company, (y) other than loans in the Ordinary Course form of BusinessVOI Receivables and (z) ordinary advances (A) to employees for travel and related business expenses and (B) to commission-based sales representatives not exceeding $40,000 for any individual and $500,000 in the aggregate, in the case of each of clauses (x) through (z), in the ordinary course of business consistent with past practice;
(viie) not (Ax) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guaranteeissue, sell, mortgagegrant pursuant to any Plan (including the Option Plan), pledge, dispose of or incur encumber, subject to any Lien on or dispose of, (y) split, combine or reclassify or (z) redeem, purchase or otherwise encumber acquire, in each case, any Assets, shares of any class or series of its capital stock or other than equity interest in the Ordinary Course of Business;
(ix) acquire any real property Company or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur its Subsidiaries or any Indebtedness or issue any debt securities or options, warrants or other rights to acquire debt purchase any such capital stock or equity interest or any securities of Seller convertible into or assume, guarantee exchangeable for such capital stock or endorse, as an accommodation equity interests or otherwise, the obligations of otherwise make or effect any Person for Indebtedness or capital obligations, change in the case issued and outstanding capitalization of the Company or any of the foregoing;
(xii) cancel any debts owed to or claims held by Seller in excess its Subsidiaries, except for shares of $35,000;
(xiii) abandon, disclaim, dedicate Company Common Stock issued prior to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreement;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;
(xv) revalue any of the assets of the Seller, except as required by GAAP, or enter into, or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contract;
(xvi) Effective Time (A) change any method upon the exercise of accounting or accounting practice, other than changes required the Options outstanding on the date hereof under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Business;
(xvii) make, revoke or change any Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date;
(xviii) modify, amend or terminate (other than pursuant to the expiration of its term other than as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunder;
(xix) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property;
(xx) commence, settle or compromise any Proceeding;
(xxi) cancel, materially reduce or fail to maintain any insurance policy;
(xxii) change or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;
(xxiii) engage in any transaction with any Related Parties; Option Plan or
(xxiv) authorize or enter into any agreement, commitment or understanding (whether written or oral) with respect to the foregoing.
Appears in 1 contract
Sources: Agreement and Plan of Merger and Reorganization (Trendwest Resorts Inc)
Interim Operations. (a) From Seller agrees that, during the period from the execution date hereof until of this Agreement through the earlier of the Closing or termination of this Agreement, Seller shall (i) operate the Business only in the Ordinary Course of Business, including maintaining appropriate service levels, and in compliance with applicable Law including any COVID-19 Measures; and (ii) use commercially reasonable efforts to (A) maintain and preserve intact the business organization and goodwill of the Business, the Assets and the Assumed Liabilities, (B) maintain satisfactory relationships with Seller’s clients, operators, distributors, customers, insurance underwriters and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services of, the Business Employees.
(b) Without limiting the generality of the foregoing, except as set forth in Section 5.1(b) of the Disclosure Schedule, as expressly permitted by this Agreement or as approved in writing by ▇▇▇▇▇, from the date hereof until the earlier occur of the Closing or the termination of this AgreementAgreement in accordance with its terms, Seller shall not take any action which would require disclosure on Section 2.8 and, where applicable, its Affiliates, will conduct operations in respect of the Disclosure Schedule Properties in the ordinary course of business (or, where Seller or an Affiliate of Seller is not the operator of a Property, will continue their actions as a non-operator in the ordinary course of business), and, without Buyer’s consent, neither Seller nor any Affiliate of Seller will:
1. sell or otherwise dispose of or mortgage any material portion of the Properties, except for sales or other dispositions of (i) oil, gas and other minerals in the ordinary course of business after production, or (ii) equipment and other personal property or fixtures in the ordinary course of business where the same has become obsolete, is otherwise no longer necessary for the operation of the Properties, or is replaced by an item or items of at least equal suitability. Should Seller receive (or desire to make) any proposals to drill additional ▇▇▇▇▇ on the Oil and Gas Properties, or to conduct other operations which require consent of non-operators under the applicable operating agreement, Seller will notify Buyer of, and consult with Buyer concerning, such proposals, but any decisions with respect to proposals shall be made by Seller in its sole discretion, so long as the decisions are made in the ordinary course of business. Without expanding any obligations which Seller may have to Buyer, it is expressly agreed that Seller shall never have any liability to Buyer with respect to operation of an Oil and Gas Property greater than that which Seller might have as the operator to a non-operator under the applicable operating agreement (or, in the absence of such an agreement, under the AAPL 610 (1989 Revision) form Operating Agreement) IT BEING RECOGNIZED THAT, UNDER SUCH AGREEMENTS AND SUCH FORM, THE OPERATOR IS NOT RESPONSIBLE FOR ITS OWN NEGLIGENCE, AND HAS NO RESPONSIBILITY OTHER THAN FOR GROSS NEGLIGENCE OR WILLFUL MISCONDUCT;
2. in respect of the Properties, issue any note, bond, or other debt instrument;
(i) take agree to the imposition of any security interest or omit to take lien on the Properties or (ii) allow any action that results encumbrance which would impose a security interest or may reasonably be expected to result in lien on account of unpaid amounts upon any of the representations Properties that will not be released at or before Closing; provided that, in the event of any such encumbrance or security interest, Seller shall provide to Buyer prompt written notice thereof in accordance with Section 16 and warranties of Seller shall promptly deliver to Buyer all documentation and materials relating to any such encumbrance or the Beneficial Owners set forth herein being security interest;
4. waive, release, grant or becoming untrue transfer any material rights or modify or change in any material respect or in any of the conditions set forth herein not being satisfied;Material Agreement; or
(ii) amend or otherwise change the organizational documents of Seller;
(iii) (A) authorize, issue, sell or transfer any membership interests or other securities of Seller, (B) adjust, split, combine or reclassify or otherwise amend the terms of any membership interest or other security of Seller, (C) declare, authorize, set aside make or pay any dividend or other distribution (whether in cash, stock or other property) or (D) enter into any agreement with respect to the voting of any equity of Seller;
(iv) (A) merge or consolidate with any other Person, acquire any business or assets of any other Person (whether by merger, stock purchase, asset purchase or other business combination), other than the purchase of supplies in the Ordinary Course of Business or (B) form any new Subsidiary;
(v) (A) materially change the operation of the Business, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of business;
(vi) make any loans, advances or capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of Business);
(vii) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on or otherwise encumber any Assets, other than in the Ordinary Course of Business;
(ix) acquire any real property or undertake or 5. commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur any Indebtedness or issue any debt securities or warrants or other rights to acquire debt securities of Seller or assume, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person for Indebtedness or capital obligations, in the case of any of the foregoing;
(xii) cancel any debts owed to or claims held by Seller in excess of $35,000;
(xiii) abandon, disclaim, dedicate to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreement;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;
(xv) revalue any of the assets of the Seller, except as required by GAAP, or enter into, or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contract;
(xvi) (A) change any method of accounting or accounting practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Business;
(xvii) make, revoke or change any Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date;
(xviii) modify, amend or terminate (other than pursuant to the expiration of its term other than as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunder;
(xix) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property;
(xx) commence, settle or compromise any Proceeding;
(xxi) cancel, materially reduce or fail to maintain any insurance policy;
(xxii) change or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;
(xxiii) engage in any transaction with any Related Parties; or
(xxiv) authorize or enter into any agreement, commitment or understanding (whether written or oral) with respect to the foregoing.
Appears in 1 contract
Interim Operations. (a) From Except (i) as set forth in Section 7.1(a) of the Company Disclosure Letter, (ii) as expressly contemplated or permitted by this Agreement, (iii) as may be required to comply with applicable Law, any Order or any written notice from a Governmental Entity or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld delayed or conditioned), during the period from the date hereof of this Agreement until the earlier of the Closing or Effective Time and the date of termination of this AgreementAgreement in accordance with Section 10.1, Seller shall (i) operate the Business only in the Ordinary Course of Business, including maintaining appropriate service levelsCompany shall, and in compliance with applicable Law including any COVID-19 Measures; and (ii) use commercially reasonable efforts to (A) maintain and preserve intact the shall cause each of its Subsidiaries to, conduct its respective business organization and goodwill of the Business, the Assets and the Assumed Liabilities, (B) maintain satisfactory relationships with Seller’s clients, operators, distributors, customers, insurance underwriters and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services of, the Business Employeesordinary course.
(b) Without limiting the generality of the foregoing, except Except (i) as set forth in Section 5.1(b7.1(b) of the Company Disclosure ScheduleLetter, (ii) as expressly contemplated or permitted by this Agreement Agreement, (iii) as may be required to comply with applicable Law, any Order or as approved in writing by ▇▇▇▇▇any written notice from a Governmental Entity, or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld delayed or conditioned), during the period from the date hereof of this Agreement until the earlier of the Closing or Effective Time and the date of termination of this AgreementAgreement in accordance with Section 10.1, Seller the Company shall not, and shall not take permit any action which would require disclosure on Section 2.8 of the Disclosure Schedule orits Subsidiaries to:
(i) take or omit to take any action that results or may reasonably be expected to result in any of the representations and warranties of Seller or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfied;
(ii) amend or otherwise change the organizational documents of Seller;
(iii) (A) authorize, issue, sell or transfer any membership interests or other securities of Seller, (B) adjust, split, combine or reclassify its capital stock or otherwise amend the terms capital stock of any membership interest or other security of Seller, its Subsidiaries; (CB) declare, authorize, set aside make declare or pay any dividend or make any other distribution (whether in cash, respect of the shares of its capital stock or any securities or obligations convertible into or exchangeable for any shares of its capital stock (except for any dividend or other propertydistribution by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company); (C) directly or indirectly redeem, purchase or otherwise acquire any shares of its capital stock or any securities or obligations convertible into or exchangeable for any shares of its capital stock (except for the acquisition of Company Common Stock (1) tendered in connection with a cashless exercise of Company Options or in order to pay Taxes with respect to equity-based awards, or for the Company to satisfy withholding obligations in respect of such Taxes, in connection with Company Options or other equity-based awards or (2) in connection with the forfeiture of equity-based awards granted pursuant to the Company Equity Plans); or (D) enter into except for transactions solely between the Company and its Subsidiaries, or between Subsidiaries of the Company, issue, deliver, sell, pledge, dispose of, grant, award or encumber any agreement with respect to the shares of capital stock, ownership interests or voting securities, or any options, warrants, convertible securities or other rights of any equity kind to acquire or receive any shares of Sellercapital stock, any other ownership interests or any voting securities (including restricted stock units, stock appreciation rights, phantom stock or similar instruments), of the Company or any of its Subsidiaries (except for issuances (1) of shares of Company Common Stock upon the exercise or settlement of Company Options, rights under the Company ESPP or pursuant to other equity-based awards in effect on the date hereof, (2) required to be made by virtue of the consummation of the Merger or the Offer, or (3) required to be made pursuant to this Agreement or any other agreement in effect on the date hereof to which the Company is a party, or otherwise permitted by this Section 7.1(b));
(ivii) sell, transfer, mortgage, encumber, dispose of or otherwise subject to any Lien (other than a Permitted Lien) any of its material assets or material properties (other than to a wholly owned Subsidiary), by merger, consolidation, asset sale or other business combination (including formation of a joint venture) or cancel, release or assign any material Indebtedness or claim, in each case, except (A) merge such actions in the ordinary course of business consistent with past practice, including dispositions of obsolete or consolidate with worthless assets, sales of receivables and other assets in the ordinary course of business and the licensing of Company Intellectual Property to customers in the ordinary course of business, (B) sales of immaterial assets for a purchase price of $2,000,000 or less in any single case or $8,000,000 in the aggregate and (C) leases and subleases of real property owned by the Company or any Company Subsidiary and leases of real property under which the Company or any Company Subsidiary is a tenant or a subtenant and voluntary terminations or surrenders of such leases;
(iii) make any acquisition, by purchase or other Personacquisition of stock or other equity interests, acquire any business or assets of any other Person (whether by merger, stock purchasejoint venture, consolidation, asset purchase or other business combination), or by contributions to capital, or make any material purchases of any property or assets, in or from any other Person other than a wholly owned Subsidiary of the purchase Company, except (A) in all cases as expressly required by the terms of supplies any Contract in force on the Ordinary Course date of Business or this Agreement; and (B) form any new Subsidiary;
(v) (A) materially change the operation of the Business, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of otherwise permitted by this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of business;
(vi) make any loans, advances or capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of BusinessSection 7.1(b);
(vii) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employees, (Biv) enter into, amend or waive any rights under any employmentrenew, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adoptextend, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on or otherwise encumber any Assets, other than in the Ordinary Course of Business;
(ix) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur any Indebtedness or issue any debt securities or warrants or other rights to acquire debt securities of Seller or assume, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person for Indebtedness or capital obligations, in the case of any of the foregoing;
(xii) cancel any debts owed to or claims held by Seller in excess of $35,000;
(xiii) abandon, disclaim, dedicate to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreement;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;
(xv) revalue any of the assets of the Seller, except as required by GAAP, or enter into, or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contract, in each case other than in the ordinary course of business;
(xviv) except as required by Law or any Contract in effect on the date hereof (including, without limitation, this Agreement and the Company Benefit Plans and Employment Agreements) or as set forth on Section 7.1(b)(v) of the Company Disclosure Letter: (A) change amend materially or terminate any method Company Benefit Plan or material Employment Agreement, or establish, adopt or enter into any employment agreement or any plan, program, policy or arrangement that, if in effect on the date of accounting this agreement, would be a material Company Benefit Plan or accounting practicematerial Employment Agreement, (B) enter into any collective bargaining agreement or similar material labor agreement with a labor union, works council or other employee representative, or (C) increase the salary or wages, as applicable, bonus or other incentive compensation, or other benefits or compensation of any director, officer or employee of the Company or any of its Subsidiaries, except for (i) increases in the ordinary course of business consistent with past practice in connection with annual performance and salary reviews, not to exceed, in the aggregate, four percent (4%) of such person’s compensation or (ii) non material increases in benefits or compensation made in the ordinary course of business;
(vi) amend the Company Charter or Company By-Laws;
(vii) incur any Indebtedness, except, in each case, (A) intercompany guarantees or intercompany “keep well” or other agreements to maintain any financial statement condition of the Company or any Company Subsidiary, (B) letters of credit or guarantees issued in the ordinary course of business, (C) Indebtedness incurred through the revolving credit facility under the Credit Agreement (including in respect of letters of credit), (D) Indebtedness having an aggregate principal amount outstanding that is not in excess of $2,500,000 (provided that any such Indebtedness is prepayable without premium or penalty, other than changes required customary breakage costs), (E) Indebtedness incurred in connection with the refinancing of any Indebtedness existing on the date hereof (other than the Notes under applicable Law the Notes Indenture or GAAP the Credit Agreement) or permitted to be incurred, assumed or otherwise entered into hereunder (Bprovided that any such Indebtedness is prepayable without premium or penalty, other than customary breakage costs) fail to maintain the Seller’s books, accounts and records (F) capital leases entered into in the Ordinary Course ordinary course of Businessbusiness consistent with past practice;
(xviiviii) make, revoke or change any material method of Tax election by Seller accounting, or take any material position on any material Tax Return, in each case that could adversely impact is inconsistent with elections made or positions taken in preparing or filing similar Tax Returns in prior periods; enter into any closing agreement or settle or compromise any material Tax liability of the Company or any of its Subsidiaries, or agree to any extension or waiver of the statute of limitations with respect to the assessment or determination of any material amount of Taxes due or payable (and/or any direct or indirect owner Taxes, in each case except in the ordinary course of equity interests in Buyer) after the Closing Datebusiness;
(xviiiix) modifymake any material changes in its accounting methods, amend practices or terminate policies, except as may be required under GAAP (other than or any interpretation thereof), including pursuant to standards, guidelines and interpretations of the expiration of its term other than as a result of Financial Accounting Standards Board or any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereundersimilar organization;
(xixx) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property;
(xx) commencewaive, settle or compromise any Proceedingmaterial pending or threatened suit, audit, action or claim, other than waivers, settlements or compromises that involve only the payment of monetary damages by the Company or any of its Subsidiaries;
(xxixi) cancel, materially reduce or fail to maintain and protect, or abandon, allow to lapse, expire or be cancelled any insurance policyregistration or application for registration for, material Company Intellectual Property, or knowingly disclose to any Person not an employee of, or consultant or advisor to, the Company or any of its Subsidiaries bound by confidentiality obligations to the Company or such Subsidiary, or otherwise knowingly disclose any trade secret, process or know-how not a matter of public knowledge prior to the date of this Agreement, except pursuant to judicial order or process or commercially reasonable disclosures in the ordinary course of business made under an existing Contract or agreement containing confidentiality obligations for the benefit of the Company or its Subsidiary, as applicable;
(xxiixii) change communicate with employees of the Company or modify any of its Subsidiaries regarding the Seller’s creditfuture compensation, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables benefits or other Liabilities treatment that they will receive following the Merger Closing, other than (i) any such communication which is consistent with prior directives or documentation provided to the Company by Parent (in which case, Parent shall provide the Company with reasonable prior notice of, and the reasonable opportunity to review and comment upon, any material respect;
such communication), (xxiiiii) engage any such communication which addresses any employee’s right to receive the Offer Price or the Merger Consideration or any employee’s treatment of his or her equity awards, (iii) any such communication which addresses any employee in their capacity as a Stockholder of the Company or (iv) any transaction with any Related Partiescommunication regarding matters addressed in Section 8.4 of this Agreement; or
(xxivxiii) authorize agree to, or enter into make any agreementcommitment to, commitment or understanding (whether written or oral) with respect to take any of the foregoingactions prohibited by this Section 7.1(b).
Appears in 1 contract
Interim Operations. (a) From the date hereof of this Agreement until the earlier of the Closing or Effective Time and termination of this AgreementAgreement in accordance with its terms, Seller the Company covenants and agrees as to itself and its Subsidiaries that, from the date of this Agreement until the Effective Time, the business of it and its Subsidiaries shall (i) operate the Business only be conducted in the Ordinary Course of Businessordinary and usual course consistent with past practice and, including maintaining appropriate service levelsto the extent consistent therewith, it and in compliance with applicable Law including any COVID-19 Measures; and (ii) its Subsidiaries shall use commercially their respective reasonable best efforts to (Ax) preserve intact their business organizations, assets and lines of business and (y) maintain its and preserve intact the business organization their existing relations and goodwill of the Business, the Assets and the Assumed Liabilities, (B) maintain satisfactory relationships with Seller’s clients, operators, distributorsGovernmental Entities, customers, insurance underwriters suppliers, employees and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services of, the Business Employees.
(b) agents. Without limiting the generality of the foregoingforegoing and in furtherance thereof, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as Parent may approve in writing (such approval not to be unreasonably withheld), (C) as required by applicable Laws or definitive interpretations thereof or by any Governmental Entity or (D) as set forth in Section 5.1(b4.1(a) of the Company Disclosure ScheduleLetter, as expressly permitted by this Agreement or as approved in writing by ▇▇▇▇▇the Company will not, from the date hereof until the earlier of the Closing or the termination of this Agreementand will not permit its Subsidiaries, Seller shall not take any action which would require disclosure on Section 2.8 of the Disclosure Schedule orto:
(i) adopt any amendments to its charter or bylaws or, in the case of any Subsidiary that is not a corporation, similar applicable organizational documents;
(ii) (A) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, business combination, restructuring, recapitalization or other reorganization (other than this Agreement), (B) acquire by merging or consolidating with, or by purchasing an equity interest in or portion of the assets of (other than as set forth in Section 4.1(a)(iii)), or by any other manner, any business or any corporation, partnership, joint venture, association or other business organization or division thereof, (C) take or omit to take any action that results would cause any rights under Material Intellectual Property, including with respect to any registrations or may reasonably applications for registration, to lapse, be expected to result abandoned or canceled, or fall into the public domain, other than actions or omissions in any the ordinary course of the representations business consistent with past practice and warranties not otherwise in violation of Seller or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfied;
(ii) amend or otherwise change the organizational documents of Seller;
(iii) (A) authorize, issue, sell or transfer any membership interests or other securities of Seller, (B) adjust, split, combine or reclassify or otherwise amend the terms of any membership interest or other security of Seller, (C) declare, authorize, set aside make or pay any dividend or other distribution (whether in cash, stock or other property) this Section 4.1 or (D) enter into a joint venture or partnership or similar third-party business enterprise;
(iii) acquire assets outside of the ordinary course of business or capital stock from any agreement other Person, other than (A) acquisitions of assets at or below fair market value with respect a purchase price not in excess of $500,000 individually or $2,000,000 in the aggregate, in each case for any transaction or series of related transactions, and capital expenditures permitted by clause (x) of this Section 4.1 and (B) acquisitions pursuant to the voting Contracts in effect as of any equity the date of Sellerthis Agreement set forth on Section 4.1(a) of the Company Disclosure Letter;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer or encumbrance of, any shares of capital stock of the Company or any its Subsidiaries (other than (A) merge or consolidate with any other Personthe issuance of Shares upon the exercise of Company Options and the settlement of Restricted Shares, acquire any business or assets of any other Person Restricted Stock Units, and Performance Stock Units (whether by mergerand dividend equivalents thereon, stock purchase, asset purchase or other business combination), other than if applicable) outstanding on the purchase of supplies in the Ordinary Course of Business or (B) form any new Subsidiary;
(v) (A) materially change the operation of the Business, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms date of this Agreement or (B) enter the issuance of shares of capital stock by a Subsidiary of the Company to the Company or another Subsidiary of the Company) or securities convertible or exchangeable into a new line or exercisable for any shares of business such capital stock, or abandon any options, warrants or discontinue an existing line other rights of businessany kind to acquire any shares of such capital stock or such convertible, exchangeable or exercisable securities;
(viv) make any loans, advances or capital contributions to, to or investments in, in any Person (other than advances the Company or any direct or indirect Subsidiary of expenses the Company);
(vi) (A) declare, set aside or pay any dividend or other distribution, whether payable in cash, stock or other property, with respect to Business Employees its capital stock, except for dividends by any wholly owned direct or indirect Subsidiary of the Company to the Company or any other wholly owned direct or indirect Subsidiary of the Company, (B) split, combine or reclassify the Shares or any other outstanding capital stock of the Company or any of the Subsidiaries of the Company or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution therefor (other than issuances to the Company or another wholly owned Subsidiary of the Company), (C) redeem, purchase or otherwise acquire, directly or indirectly, any capital stock or other Rights of the Company or any of its Subsidiaries, except for acquisitions, or deemed acquisitions, of Shares or other equity securities of the Company in connection with (1) the satisfaction of Tax withholding obligations with respect to Company Options, Restricted Shares, Restricted Stock Units or Performance Stock Units outstanding on the date of this Agreement, (2) the payment of the exercise price of Company Options outstanding on the date of this Agreement with Shares (including in connection with “net exercises”) and (3) forfeitures of Company Options, Restricted Shares, Restricted Stock Units or Performance Stock Units, in each case, outstanding on the date of this Agreement, pursuant to their terms as in effect on the date of this Agreement, and except for acquisitions or deemed acquisitions of Shares or other equity securities of the Company or any of its wholly owned Subsidiaries by the Company or any of its wholly owned Subsidiaries, or (D) enter into any agreement, understanding or arrangement with respect to the sale, voting, registration or repurchase of the Company’s capital stock or other Rights of the Company or any of its Subsidiaries; provided that nothing contained herein shall prohibit dividends and distributions paid or made on a pro rata basis by direct or indirect Subsidiaries of the Company in the Ordinary Course of Business)ordinary course consistent with past practice;
(vii) redeem, repurchase, prepay, defease, incur, assume, endorse, guarantee or otherwise become liable for or modify the terms of any Indebtedness of the Company and its Subsidiaries in excess of $700,000 (it being understood that the terms of any such Indebtedness shall permit the repayment of such Indebtedness upon the Closing Date without premium or penalty). “Indebtedness” of any Person means (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employeesall indebtedness for borrowed money, (B) enter intoany other indebtedness which is evidenced by a note, amend bond, indenture, debenture or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employeesimilar Contract, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on or otherwise encumber any Assets, other than in the Ordinary Course of Business;
(ix) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official all reimbursement obligations with respect to Seller(1) letters of credit, (C) an assignment for the benefit of creditors bank guarantee or an admission in writing of the inability of Seller to pay its debts as they become due, bankers’ acceptances or (D2) any surety, customs, reclamation or performance bonds (in each case not related to judgments or litigation) other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur any Indebtedness or issue any debt securities or warrants or other rights to acquire debt securities of Seller or assume, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person for Indebtedness or capital obligationsthan, in the case of any of the foregoing;
clause (xii) cancel any debts owed to or claims held by Seller in excess of $35,000;
(xiii) abandon2), disclaim, dedicate to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreement;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;
(xv) revalue any of the assets of the Seller, except as required by GAAP, or enter into, or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contract;
(xvi) (A) change any method of accounting or accounting practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records those entered into in the Ordinary Course ordinary course of Business;
business consistent with past practice and (xviiD) make, revoke or change any Tax election all guarantees by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date;
(xviii) modify, amend or terminate (other than pursuant to the expiration of its term other than as a result such Person for obligations of any action taken by Seller, or other than as a result Person constituting Indebtedness of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereundersuch other Person;
(xix) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property;
(xx) commence, settle or compromise any Proceeding;
(xxi) cancel, materially reduce or fail to maintain any insurance policy;
(xxii) change or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;
(xxiii) engage in any transaction with any Related Parties; or
(xxiv) authorize or enter into any agreement, commitment or understanding (whether written or oral) with respect to the foregoing.
Appears in 1 contract
Interim Operations. Except (a1) From as required by applicable Law, (2) as Parent may approve in writing (such approval not to be unreasonably withheld, conditioned or delayed) (3) as expressly disclosed in Section 6.1(a) of the date hereof until Company Disclosure Letter or (4) as expressly provided for in this Agreement, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement and prior to the earlier of (x) the Closing Effective Time or (y) termination of this Agreement, Seller Agreement in accordance with ARTICLE VIII (A) the Company shall (i) operate the Business only in the Ordinary Course of Business, including maintaining appropriate service levels, and in compliance with applicable Law including any COVID-19 Measures; and (ii) use its commercially reasonable efforts to (A) maintain conduct its business and preserve intact the business organization and goodwill of its Subsidiaries in the Business, the Assets and the Assumed Liabilities, (B) maintain satisfactory relationships ordinary course of business consistent with Seller’s clients, operators, distributors, customers, insurance underwriters and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, past practice in all material respects; provided, however that no action that is specifically permitted by any of subclauses (a) through (n) of Section 6.1 (B) shall be deemed a breach of either this clause (A) or any other obligations when due, subclause of Section 6.1 (DB) maintain in effect all Permits and (EB) maintain good relations withwithout limiting the generality of, and keep available the services in furtherance of, the Business Employees.foregoing the Company shall not and will not permit any of its Subsidiaries to:
(ba) Without limiting (i) amend its certificate of incorporation or bylaws (or comparable governing documents), other than amendments to the generality governing documents of any wholly owned Subsidiary of the foregoingCompany that would not prevent, except as set forth in Section 5.1(b) of materially delay or materially impair the Disclosure Schedule, as expressly permitted by this Agreement or as approved in writing by ▇▇▇▇▇, from the date hereof until the earlier of the Closing Merger or the termination of other transactions contemplated by this Agreement, Seller shall not take any action which would require disclosure on Section 2.8 of the Disclosure Schedule or:
(i) take or omit to take any action that results or may reasonably be expected to result in any of the representations and warranties of Seller or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfied;
(ii) amend split, combine, subdivide or otherwise change reclassify its outstanding equity interests (except for any such transaction by a wholly owned Subsidiary of the organizational documents Company which remains a wholly owned Subsidiary after consummation of Seller;
such transaction), (iii) (A) authorize, issue, sell or transfer any membership interests or other securities of Seller, (B) adjust, split, combine or reclassify or otherwise amend the terms of any membership interest or other security of Seller, (C) declare, authorize, set aside make or pay any dividend or other distribution (whether payable in cash, stock or other propertyproperty (or any combination thereof) in respect of any of its equity interests (except for any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company) or (Div) enter purchase, repurchase, redeem or otherwise acquire any of its equity interests or any securities convertible or exchangeable into or exercisable for any agreement of its equity interests (other than (1) pursuant to the exercise of Company Options or the forfeiture of, or withholding of Taxes with respect to to, Company Options, Restricted Stock Units or Performance Restricted Stock Units outstanding on the voting date hereof or (2) purchases, repurchases, redemptions or other acquisitions of securities of any equity wholly owned Subsidiary of Sellerthe Company by the Company or any other wholly owned Subsidiary of the Company);
(iv) (Ab) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than mergers among, or the restructuring, reorganization or liquidation of any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Merger or the other transactions contemplated by this Agreement);
(c) except as required by a Company Plan in effect as of the date hereof and disclosed in writing to Parent, (i) increase the compensation or benefits payable to the Chief Executive Officer of the Company or any employee of the Company who directly reports to the Chief Executive Office of the Company, (ii) accelerate the vesting or payment of any compensation, award or benefit, grant or pay any extraordinary bonus or implement any new severance or other compensation or benefit entitlements, including any transaction, retention or other similar bonus, (iii) adopt, terminate or make any change to any Company Plan that would materially increase the costs to the Company in respect of such Company Plan, or (iv) hire, engage or terminate the employment or engagement of any executive officer of the Company;
(d) incur any Indebtedness, guarantee, endorse, assume or otherwise become liable or responsible for any Indebtedness of another Person or issue any rights to acquire any Indebtedness, except (i) borrowings under the Company’s revolving credit facility (as in effect as of the date hereof) pursuant to the Company’s Existing Credit Agreement either (x) in the ordinary course of business or (y) as directed by Parent or Merger Sub at Closing, (ii) inter-company Indebtedness among the Company and its wholly owned Subsidiaries, (iii)(A) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (B) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (iv) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice and not for speculative purposes or (v) Indebtedness incurred at Closing at the direction of Parent or Merger Sub in accordance with Section 6.19;
(e) make or commit to any capital expenditures other than in the ordinary course of business consistent with past practice and which do not exceed, in the aggregate, for the period between the date of this Agreement and the Closing Date, 55% of the capital expenditures provided for in the 2024 budget previously provided to Parent;
(f) other than in the ordinary course of business consistent with past practice, transfer, lease, license, sell, assign, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including equity interests of any of its Subsidiaries but not including any Intellectual Property), with a fair market value in excess of $5,000,000 individually or $10,000,000 in the aggregate (other than transactions among the Company and its wholly owned Subsidiaries);
(g) issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any other equity interest in the Company or any Company Subsidiary or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares or equity interest, except (i) for any Shares issued pursuant to Company Options, Restricted Stock Units and Performance Restricted Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the applicable Company Stock Plan, that are outstanding on the date hereof and (ii) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company;
(h) other than in the ordinary course of business, spend or commit to spend in excess of $5,000,000 individually or $10,000,000 in the aggregate to acquire any business or to acquire assets of any or other Person (property, whether by merger, stock purchaseconsolidation, asset purchase or other business combination), other than the purchase of supplies in property or assets or otherwise (valuing any non-cash consideration at its fair market value as of the Ordinary Course date of Business or (B) form any new Subsidiarythe agreement for such acquisition);
(vi) make any material change with respect to its financial accounting policies or procedures, except as required by changes in GAAP (A) materially change the operation of the Business, Assets or the Assumed Liabilities or any method interpretation thereof) or by applicable Law;
(j) abandon any material existing lines of purchase, sale, lease, management, marketing, promotion business or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a any new line of business or abandon or discontinue an existing other than any line of businessbusiness that is reasonably ancillary to and a reasonably foreseeable extension of any line of business as of the date of this Agreement, as determined by the Company in its sole discretion;
(vik) other than in the ordinary course of business consistent with past practice, make any loans, advances or capital contributions to, or investments in, any Person (other than loans, advances or capital contributions to the Company or any direct or indirect wholly owned Subsidiary of expenses to Business Employees in the Ordinary Course of BusinessCompany);
(viil) (Ai) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive modify in any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on or otherwise encumber any Assets, other than in the Ordinary Course of Business;
(ix) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with material respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur any Indebtedness or issue any debt securities or warrants or other rights to acquire debt securities of Seller or assume, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person for Indebtedness or capital obligations, in the case of any of the foregoing;
(xii) cancel any debts owed to or claims held by Seller in excess of $35,000;
(xiii) abandon, disclaim, dedicate to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreement;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;
(xv) revalue any of the assets of the Seller, except as required by GAAP, or enter into, or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contract;
(xvi) (A) change any method of accounting or accounting practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Business;
(xvii) make, revoke or change any Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date;
(xviii) modify, amend or terminate (other than pursuant to the excluding terminations upon expiration of its the term other than as a result of any action taken by Seller, or other than as a result of a material breach by thereof in accordance with the counterparty theretoterms thereof) any Material Contract currently in effect or termination waive, release or assign any material rights rights, claims or claims thereunderbenefits under any Material Contract or (ii) enter into any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement unless it is on terms substantially consistent with, or on terms more favorable to the Company or its Subsidiaries (and to Parent and its Subsidiaries following the Closing) than, either a Contract it is replacing; provided that the foregoing shall not prohibit or restrict the ability of the Company or its Subsidiaries to take any action described in this Section 6.1(l) in the ordinary course of business consistent with past practice; provided, further that (x) this Section 6.1(l) shall not prohibit or restrict the Company or any of its Subsidiaries from entering into a Contract to the extent that such Contract implements an act or failure to act that is expressly permitted under any of Sections 6.1(a) through 6.1(l) and (y) for the avoidance of doubt, this Section 6.1(k) shall not prohibit or restrict any Company Plans and (z) this Section 6.1(l) shall not apply to the Existing Credit Agreement and the Existing Receivables Agreement, in each case, which shall be exclusively governed by Section 6.19;
(xixA) fail to pay settle any required maintenance action, suit, case, litigation, claim, hearing, arbitration, investigation or other similar fees proceedings before or otherwise fail threatened to make required filings be brought before a Governmental Entity, other than settlements if the amount of any such settlement is not in excess of $1,000,000 individually or payments required $5,000,000 in the aggregate, in each case in excess of amounts available under the Company’s applicable insurance policy; provided that such settlements do not involve any admission of guilt, non-de minimis injunctive or equitable relief or impose non-de minimis restrictions on the business activities of the Company and its Subsidiaries or Parent and its Subsidiaries, or (B) waive, release, grant or transfer any material claim or right of material value or knowingly consent to maintain and further prosecute the termination of any applications for registration material claim or right of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Propertymaterial value;
(xxn) commenceother than in the ordinary course of business consistent with past practice, make or change any material Tax election, make any material change to any annual Tax accounting period, adopt or change any material method of Tax accounting, amend any material Tax Returns or file any claims for material Tax refunds, enter into any material closing agreement, settle any material Tax claim, audit or compromise assessment or surrender any Proceedingright to claim a material Tax refund, offset or other reduction in Tax liability;
(xxio) cancel, materially reduce negotiate or fail to maintain enter into any insurance policy;
(xxii) change or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;
(xxiii) engage in any transaction agreement with any Related Partiesa Union; or
(xxivp) authorize agree, resolve or enter into commit to do any agreement, commitment or understanding (whether written or oral) with respect to of the foregoing.
Appears in 1 contract
Sources: Merger Agreement (Agiliti, Inc. \De)
Interim Operations. (a) From the date hereof until the earlier of the Closing or termination of this Agreement, Seller shall (i) operate the Business only in the Ordinary Course of Business, including maintaining appropriate service levels, and in compliance with applicable Law including any COVID-19 Measures; and (ii) use commercially reasonable efforts to (A) maintain and preserve intact the business organization and goodwill of the Business, the Assets and the Assumed Liabilities, (B) maintain satisfactory relationships with Seller’s clients, operators, distributors, customers, insurance underwriters and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services of, the Business Employees.
(b) Without limiting the generality of the foregoing, except Except as set forth in Section 5.1(b) of the Disclosure Schedule, as expressly permitted by this Agreement or on Schedule 7.1, each of the Parent and the Company covenants and agrees as approved to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time (unless the other party shall otherwise approve in writing and except as otherwise expressly contemplated by ▇▇▇▇▇, from the date hereof until the earlier of the Closing or the termination of this Agreement, Seller shall not take any action which would require disclosure on Section 2.8 of disclosed in the Disclosure Schedule or:Schedules attached hereto or required by applicable Law):
(i) take or omit The business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to take any action that results or may reasonably be expected the extent consistent therewith, it and its Subsidiaries shall use their reasonable efforts to result in any of the representations preserve its business organization intact and warranties of Seller or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfiedmaintain its existing relations and goodwill with customers, suppliers, regulators, distributors, creditors, lessors, employees and business associates;
(ii) It shall not: (A) amend its certificate of incorporation or bylaws; (B) split, combine, subdivide or reclassify its outstanding shares of capital stock; (C) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock; or (D) repurchase, redeem or otherwise change acquire, except in connection with existing commitments under the organizational documents Parent or Company Stock Plans but subject to the obligations under subparagraph (iii) below, or permit any of Sellerits Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(iii) (ANeither it nor any of its Subsidiaries shall take any action that would prevent the Merger from qualifying as a "reorganization" within the meaning of Section 368(a) authorize, issue, sell or transfer any membership interests or other securities of Seller, (B) adjust, split, combine or reclassify or otherwise amend the terms of any membership interest or other security of Seller, (C) declare, authorize, set aside make or pay any dividend or other distribution (whether in cash, stock or other property) or (D) enter into any agreement with respect to the voting of any equity of Seller;
(iv) (A) merge or consolidate with any other Person, acquire any business or assets of any other Person (whether by merger, stock purchase, asset purchase or other business combination), other than the purchase of supplies in the Ordinary Course of Business or (B) form any new Subsidiary;
(v) (A) materially change the operation of the Business, Assets Code or the Assumed Liabilities or that would cause any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of its representations and warranties in this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of business;
(vi) make any loans, advances or capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of Business);
(vii) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on or otherwise encumber any Assets, other than in the Ordinary Course of Business;
(ix) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur any Indebtedness or issue any debt securities or warrants or other rights to acquire debt securities of Seller or assume, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person for Indebtedness or capital obligations, in the case of any of the foregoing;
(xii) cancel any debts owed to or claims held by Seller in excess of $35,000;
(xiii) abandon, disclaim, dedicate to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreement;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;
(xv) revalue any of the assets of the Seller, except as required by GAAP, or enter into, or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contract;
(xvi) (A) change any method of accounting or accounting practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Business;
(xvii) make, revoke or change any Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date;
(xviii) modify, amend or terminate (other than pursuant to the expiration of its term other than as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunder;
(xix) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property;
(xx) commence, settle or compromise any Proceeding;
(xxi) cancel, materially reduce or fail to maintain any insurance policy;
(xxii) change or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities untrue in any material respect;
(xxiiiiv) engage Neither it nor any of its ERISA Affiliates shall: (A) accelerate, amend or change the period of exercisability of or terminate, establish, adopt, enter into, make any new grants or awards of stock-based compensation or other benefits under any Compensation and Benefit Plans; (B) amend or otherwise modify any Compensation and Benefit Plans; or (C) increase the salary, wage, bonus or other compensation of any directors, officers or key employees, in any transaction the case of (A), (B) and (C), except (x) for grants or awards to directors, officers and employees of it or its Subsidiaries under existing Compensation and Benefit Plans in such amounts and on such terms as are consistent with any Related Parties; or
past practice, (xxivy) authorize in the normal and usual course of its business (which may include normal periodic performance reviews and related compensation and benefit increases and the provision of individual Compensation and Benefit Plans consistent with past practice for promoted or enter into any agreement, commitment or understanding (whether written or oral) with respect to the foregoing.newly hired
Appears in 1 contract
Sources: Merger Agreement (Corzon Inc)
Interim Operations. Except as SN may otherwise consent in writing, between the date of this Agreement and the date of the Closing and except as contemplated by this Agreement, to the extent within its control, Altpoint shall not (nor shall it, to the extent within its control under the Redemption Agreement, permit Resources or Acquisition, through the granting of a consent or waiver thereunder, except as expressly required therein, to):
(a) From the date hereof until the earlier sell, transfer, assign, convey or otherwise dispose of the Closing or termination of this Agreement, Seller shall any Properties other than (i) operate the Business only oil, gas and other hydrocarbons produced, saved and sold in the Ordinary Course ordinary course of Businessbusiness, including maintaining appropriate service levels, and in compliance with applicable Law including any COVID-19 Measures; and (ii) use commercially reasonable efforts to (A) maintain personal property and preserve intact equipment which is replaced with property and equipment of comparable or better value and utility in the business organization ordinary and goodwill routine maintenance and operation of the Business, the Assets and the Assumed Liabilities, (B) maintain satisfactory relationships with Seller’s clients, operators, distributors, customers, insurance underwriters and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits Properties and (Eiii) maintain good relations withsales, transfers, assignments, conveyances or other dispositions by and keep available the services of, the Business Employees.between Resources and Acquisition;
(b) Without limiting create or permit the generality creation of any Encumbrance on the Properties, other than Permitted Encumbrances;
(c) grant any preferential right to purchase or similar right or agree to require the consent of any party to the transfer and assignment of the foregoingProperties to SN;
(d) designate any Person, except as set forth in Section 5.1(b) of the Disclosure Schedule, as expressly permitted by this Agreement or as approved in writing by other than ▇▇▇▇▇▇▇ Oil & Gas Corporation, from the date hereof until the earlier as an operator of the Closing Properties;
(e) incur or agree to incur any contractual obligation or liability, whether absolute, contingent, matured or unmatured, which would constitute an assumed liability by SN as provided in Section 6 above; provided, that Altpoint may incur such obligations or liabilities in the termination ordinary course of this Agreementbusiness or in the ordinary and routine maintenance and operation of the Properties with the consent of SN, Seller which consent shall not take be unreasonably withheld or delayed; provided, that any action which such obligation or liability incurred with SN’s consent would require disclosure not, either individually or in the aggregate, have a material adverse effect on Section 2.8 any of the Disclosure Schedule or:Properties;
(if) take or omit enter into any transaction the effect of which, considered as a whole, would be to take any action that results or may reasonably be expected to result cause Altpoint’s ownership interest in any of the representations and warranties Properties to be altered from its ownership interest as of Seller the date hereof; or
(g) agree or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in commit to do any of the conditions set forth herein not being satisfied;
(ii) amend foregoing or otherwise change the organizational documents of Seller;
(iii) (A) authorize, issue, sell or transfer any membership interests or other securities of Seller, (B) adjust, split, combine or reclassify or otherwise amend the terms to grant a waiver of any membership interest or other security of Seller, (C) declare, authorize, set aside make or pay any dividend or other distribution (whether in cash, stock or other property) or (D) enter into any agreement with respect to the voting of any equity of Seller;
(iv) (A) merge or consolidate with any other Person, acquire any business or assets of any other Person (whether by merger, stock purchase, asset purchase or other business combination), other than the purchase of supplies in the Ordinary Course of Business or (B) form any new Subsidiary;
(v) (A) materially change the operation of the Business, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of business;
(vi) make any loans, advances or capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of Business);
(vii) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on or otherwise encumber any Assets, other than in the Ordinary Course of Business;
(ix) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment covenant for the benefit of creditors or an admission in writing Altpoint under Section 8.1 of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur any Indebtedness or issue any debt securities or warrants or other rights to acquire debt securities of Seller or assume, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person for Indebtedness or capital obligations, in the case of any of the foregoing;
(xii) cancel any debts owed to or claims held by Seller in excess of $35,000;
(xiii) abandon, disclaim, dedicate to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Redemption Agreement;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;
(xv) revalue any of the assets of the Seller, except as required by GAAP, or enter into, or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contract;
(xvi) (A) change any method of accounting or accounting practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Business;
(xvii) make, revoke or change any Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date;
(xviii) modify, amend or terminate (other than pursuant to the expiration of its term other than as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunder;
(xix) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property;
(xx) commence, settle or compromise any Proceeding;
(xxi) cancel, materially reduce or fail to maintain any insurance policy;
(xxii) change or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;
(xxiii) engage in any transaction with any Related Parties; or
(xxiv) authorize or enter into any agreement, commitment or understanding (whether written or oral) with respect to the foregoing.
Appears in 1 contract
Interim Operations. (aj) From the date hereof until the earlier of the Closing Closing, except as otherwise expressly permitted or termination of required by this Agreement, Seller the Ancillary Agreements or as set forth in Section 5.1 of the Company Disclosure Letter, the Group Companies shall (i) operate conduct the Business only in the Ordinary Course ordinary course of Businessbusiness consistent with past practice and, including maintaining appropriate service levelsto the extent consistent therewith, and in compliance with applicable Law including any COVID-19 Measures; and (ii) the Group Companies shall use their respective commercially reasonable efforts to (A) maintain and preserve intact the business organization and goodwill of the Business, the Assets and the Assumed Liabilities, (B) maintain satisfactory relationships with Seller’s clients, operators, distributors, customers, insurance underwriters and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or performto, in all material respects, other obligations when due(i) preserve their present business organizations, (Dii) maintain generally their existing relations and goodwill with Governmental Authorities, customers, lessors, employees and business associates, in effect all Permits each case, with whom the Group Companies have significant relationships and (Eiii) maintain good relations with, and keep available the services of, the Business Employees.
(b) of their present employees and agents. Without limiting the generality generality, and in furtherance, of the foregoing, except as set forth in Section 5.1(b) of the Disclosure Schedule, as expressly permitted by this Agreement or as approved in writing by ▇▇▇▇▇, from the date hereof until the earlier of the Closing Closing, except as otherwise expressly permitted or the termination of required by this Agreement, Seller the Ancillary Agreements or as set forth in Section 5.1 of the Company Disclosure Letter or otherwise consented to in writing by Buyer, which consent shall not take any action which would require disclosure on Section 2.8 of be unreasonably conditioned, withheld or delayed, the Disclosure Schedule orGroup Companies shall not:
(i) amend any of their Organizational Documents or take or omit to take authorize any action that results to wind up its affairs or may reasonably be expected to result in any of the representations and warranties of Seller dissolve;
(ii) (A) except as provided under Section 5.5 or the Beneficial Owners set forth herein being or becoming untrue Section 5.13, amend in any material respect or terminate any Company Benefit Plan or establish any new arrangement that would (if it were in effect on the date hereof) constitute a Company Benefit Plan, (B) except for merit increases in the ordinary course of business consistent with past practice for Persons other than the individuals listed on Exhibit B, take any action to increase the rate of compensation (or compensation opportunity) of any of its employees, directors or managers, (C) except as otherwise contemplated by this Agreement, grant, increase or accelerate the vesting or time of payment of, or in any way cause the funding of, any other compensation, benefits, severance or other termination or retirement pay payable to any of its current or former employees, directors or managers, (D) hire or terminate (other than for cause) any employee, other than in the ordinary course of business consistent with past practice, with respect to a newly-hired employee, where the aggregate salary and target bonus does not exceed $150,000, (E) issue or forgive any loans to any employee, director, manager or consultant or (F) enter into any collective bargaining agreement that materially increases the Company’s obligations in respect of the conditions set forth herein not being satisfied;
(ii) amend covered employees, other than, in each case, to the extent required under any Company Benefit Plan, or otherwise change any other written agreement in effect as of the organizational documents date of Sellerthis Agreement or by applicable Law;
(iii) (A) authorizeother than pursuant to the terms of Options under the Option Plan outstanding as of the date of this Agreement, issue, sell sell, pledge, dispose of, transfer, grant options, warrants or transfer any membership interests rights to receive, purchase or other securities of Sellersubscribe for, (B) adjust, split, combine or reclassify authorize or otherwise amend the terms of any membership interest or other security of Seller, (C) declare, authorize, set aside make or pay any dividend or other distribution (whether in cash, stock or other property) or (D) enter into any agreement arrangement or Contract with respect to the voting issuance, pledge, disposition, transfer or sale of, or redeem or repurchase any Units or other equity interests or securities convertible into equity securities of any equity Group Company or make any changes (by combination, reorganization or otherwise) in the capital structure of Sellerthe Group Companies; provided, that if any issuance permitted hereunder would result in a Person who is not a party to this Agreement owning Units, such Person shall be required to execute and deliver a Joinder Agreement in the form of Exhibit E (a “Joinder Agreement”) simultaneously therewith;
(iv) (A) merge or consolidate with any other Person, acquire any business material properties or assets outside the ordinary course of any other Person business consistent with past practice (whether by merger, stock purchase, asset purchase or other business combination), other than pursuant to written agreements in effect as of the purchase date of supplies in the Ordinary Course of Business or (B) form any new Subsidiarythis Agreement);
(v) (A) materially change the operation of the Businesssell, Assets or the Assumed Liabilities or any method of purchaseassign, saletransfer, convey, lease, managementlicense or otherwise dispose of, marketingpledge or encumber or grant any Lien (other than a Permitted Lien) on, promotion any of its properties or operation, Assets (except such changes as may be required to comply with any Law or in the terms of this Agreement or (B) enter into a new line ordinary course of business or abandon or discontinue an existing line of businessconsistent with past practice);
(vi) make any loanschange to its accounting policies or practices, advances except as required by GAAP or capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of Business)applicable Law;
(vii) (A) institute adopt a plan of complete or announce any increase in the compensationpartial merger, bonuses consolidation, restructuring, recapitalization, liquidation, dissolution or other benefits payable to reorganization of any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee Group Company (other than for causethe transactions contemplated hereby);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose make any capital expenditures or commitments for capital expenditures in excess of or incur any Lien on or otherwise encumber any Assets$250,000, other than pursuant to the Company’s current capital expenditures budget as set forth in Section 5.1(a)(viii) of the Ordinary Course of BusinessCompany Disclosure Letter;
(ix) acquire forgive, cancel or compromise any real property material debt or undertake claim, or commit to undertake capital expenditures for the purchase waive or release any right of equipment or tangible assets exceeding $35,000 in the aggregatematerial value;
(x) agree to, request incur or adopt suffer to exist any Indebtedness within the meaning of clause (i) or (ii) or (iii) of the definition thereof except for (A) any moratorium or suspension working capital borrowings pursuant to the terms of payment of any Indebtednessthe Existing Credit Facilities, (B) immaterial other Indebtedness incurred in the appointment ordinary course of a receiver, administrator, liquidator, assignee, trustee business consistent with past practice or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission Indebtedness accruing automatically pursuant to Material Contracts evidencing Indebtedness in writing effect as of the inability date of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C)this Agreement;
(xi) incur make any Indebtedness material loans, advances, guarantees or issue any debt securities capital contributions to or warrants or other rights to acquire debt securities of Seller or assume, guarantee or endorse, as an accommodation or otherwise, the obligations of investments in any Person for Indebtedness or capital obligations, in the case of (other than any of the foregoingGroup Company);
(xii) cancel fail to pay or satisfy when due any debts owed to or claims held by Seller material Liability of any Group Company (other than any such Liability that is being contested in excess of $35,000good faith);
(xiii) abandondeclare, disclaimset aside, dedicate make or pay any non-cash dividend or other non-cash distribution or enter into any Contract with respect to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreementvoting of its Units;
(xiv) disclose any confidential abandon, fail to maintain or proprietary information allow to expire (other than at the natural expiration of its terms), or confidential Business Intellectual Property sell or exclusively license to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Sellerany Group Company IP Rights owned by any Group Company;
(xv) revalue any of the assets of the Seller, except as required by GAAP, or (A) enter into, or permit any of the assets of the Seller to become bound by into any Contract that is or would constitute have been a Material ContractContract within the meaning of clause (i), (ii), (iii), (v) (other than those Contracts which are entered into in the ordinary course of business consistent with past practice), (ix), (xiii), (xiv), (xv), (xvi) or (xvii) of Section 2.8 if entered into prior to the date hereof, (B) except in the ordinary course of business consistent with past practice, terminate any Material Contract or (C) amend or modify any Material Contract in any material respect (other than those amendments or modifications to Material Contracts within the meaning of clause (vi) or (vii) which are made in the ordinary course of business consistent with past practice);
(xvi) (A) except as required by Law, make any Tax election, change any annual Tax accounting period or any method of accounting Tax accounting, amend any Tax Return, file a claim for any Tax refund, enter into any closing agreement, or accounting practicesettle or otherwise resolve any Tax claim, other than changes required under applicable Law audit, examination, adjustment or GAAP or (B) fail assessment that, in each case, is material to maintain the Seller’s books, accounts and records in the Ordinary Course of BusinessGroup Companies;
(xvii) makesettle or compromise any Litigation pending before any Governmental Authority, revoke or change any Tax election by Seller that could adversely impact other material Litigation, against any Group Company, other than settlements or compromises of Litigation which, in the amount aggregate, do not involve money damages in excess of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date;$150,000; or
(xviii) modify, amend agree or terminate (other than pursuant commit to the expiration do any of its term other than as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunder;
(xix) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property;
(xx) commence, settle or compromise any Proceeding;
(xxi) cancel, materially reduce or fail to maintain any insurance policy;
(xxii) change or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;
(xxiii) engage in any transaction with any Related Parties; or
(xxiv) authorize or enter into any agreement, commitment or understanding (whether written or oral) with respect to the foregoing.
Appears in 1 contract
Interim Operations. (a) From The Company covenants and agrees that, after the date hereof until and prior to the earlier Effective Time, its business and the business of the Closing or termination of this Agreement, Seller its Subsidiaries shall (i) operate the Business only be conducted in the Ordinary Course of Business, including maintaining appropriate service levels, ordinary and in compliance with applicable Law including any COVID-19 Measures; and (ii) use commercially reasonable efforts to (A) maintain and preserve intact the business organization and goodwill of the Business, the Assets and the Assumed Liabilities, (B) maintain satisfactory relationships with Seller’s clients, operators, distributors, customers, insurance underwriters and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, usual course in all material respects. To the extent consistent with the foregoing sentence, other obligations when duethe Company and its Subsidiaries shall use their respective reasonable best efforts to preserve their business organizations intact and maintain existing relations and goodwill with Governmental Entities, (D) maintain in effect all Permits customers, suppliers, distributors, creditors, lessors, employees and (E) maintain good relations with, business associates and keep available the services of, of the Business Employees.
(b) present employees and agents of the Company and its Subsidiaries. Without limiting the generality of the foregoing, except as set forth foregoing and in Section 5.1(b) of the Disclosure Schedule, as expressly permitted by this Agreement or as approved in writing by ▇▇▇▇▇furtherance thereof, from the date hereof until the earlier Effective Time, except (A) as otherwise expressly required or permitted by this Agreement or the Voting Agreement, (B) as Purchaser may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned), (C) as set forth in Section 5.1 of the Closing Company Disclosure Letter or (D) as required by any applicable Laws (including any requirement of the termination SEC), the Company will not and will not permit its Subsidiaries to:
(a) adopt or propose any change in its certificate of incorporation or bylaws or other applicable governing documents;
(b) acquire or agree to acquire (i) by merging or consolidating with, or by purchasing a substantial portion of the stock, or other ownership interests in, or substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, association, joint venture, limited liability company or other entity or division thereof or (ii) any assets that would be material, individually or in the aggregate, to the Company and its Subsidiaries, taken as a whole, except purchases of supplies, equipment, services and inventory in the ordinary course of business and except transactions involving only the Company and its wholly owned Subsidiaries;
(c) completely or partially liquidate the Company or adopt a plan of complete or partial liquidation with respect to the Company;
(d) other than (i) Shares issuable under the Company Options outstanding as of the date of this Agreement, Seller shall not take any action which would require disclosure on Section 2.8 (ii) Shares issuable in connection with the Company Awards outstanding as of the Disclosure Schedule or:
date of this Agreement, (iiii) take at any time after April 30, 2012, awards under the Stock Plan consistent with past practice, (iv) as may be required by the Revolving Credit Facility, and (v) subject to Section 3.3, issue, sell, pledge, dispose of, grant, transfer, encumber, or omit to take authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any action that results or may reasonably be expected to result in any shares of capital stock of the representations and warranties Company or any its Subsidiaries (other than the issuance of Seller or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any shares by a wholly owned Subsidiary of the conditions set forth herein not being satisfiedCompany to the Company or another wholly owned Subsidiary), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(iie) amend make any loans, advances (except for advances to employees in respect of ordinary course business expenses) or otherwise change capital contributions to or investments in any Person (other than the organizational documents Company or any direct or indirect wholly owned Subsidiary of Sellerthe Company) other than in the ordinary course;
(iii) (A) authorize, issue, sell or transfer any membership interests or other securities of Seller, (B) adjust, split, combine or reclassify or otherwise amend the terms of any membership interest or other security of Seller, (Cf) declare, authorizeset aside, set aside make or pay any dividend or other distribution (whether distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other propertydirect or indirect wholly owned Subsidiary) or (D) enter into any agreement with respect to the voting of any equity of Sellerits capital stock;
(ivg) (A) merge other than transactions involving a direct or consolidate with any other Personindirect wholly owned Subsidiary of the Company, acquire any business reclassify, split, combine, subdivide or assets of any other Person (whether by mergerredeem, stock purchase, asset purchase or other business combination)otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock other than pursuant to the purchase of supplies in Stock Plan and the Ordinary Course of Business or (B) form any new SubsidiaryCompany Awards;
(v) (A) materially change the operation of the Business, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of business;
(vi) make any loans, advances or capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of Business);
(vii) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on or otherwise encumber any Assets, other than in the Ordinary Course of Business;
(ix) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C);
(xih) incur any Indebtedness indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt securities security of Seller the Company or assumeany of its Subsidiaries, guarantee except for (i) indebtedness for borrowed money incurred in the ordinary course of business pursuant to the Revolving Credit Facility up to the amount at any one time reflected in the applicable “Weekly Borrowing Base Balance” contained in document 10.3.27 in the Data Room plus an additional $5,000,000 and (ii) guarantees incurred in compliance with this Section 5.1 by the Company or endorse, as an accommodation any of its direct or otherwise, the obligations indirect wholly owned Subsidiaries of indebtedness of any Person for Indebtedness direct or capital obligations, in the case of any indirect wholly owned Subsidiary of the foregoingCompany;
(xiii) cancel except as set forth in the capital budgets contained in folders 3.1.2.1, 3.3.1, 3.3.2, 3.3.6, 5.10.2 5.10.3, 5.10.4, 10.3.3 and 10.3.16 of the Data Room and consistent therewith, make or authorize any debts owed to or claims held by Seller capital expenditures in the aggregate in excess of $35,000500,000;
(xiiij) abandon, disclaim, dedicate make any changes with respect to the public, sell, assign accounting policies or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreement;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;
(xv) revalue any of the assets of the Sellerprocedures, except as required by Law or changes in applicable GAAP, or enter into, or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contract;
(xvik) waive, release, assign, settle or compromise any material legal action (A) change any method of accounting or accounting practiceother than actions that are covered by Section 7.11 hereof), other than changes required under applicable Law or GAAP or (Bi) fail to maintain the Seller’s books, accounts and records in the Ordinary Course ordinary course of Businessbusiness in an amount not to exceed $250,000 (net of any amount covered by insurance) and/or (ii) if the loss resulting from such waiver, release, assignment settlement or compromise is reasonably expected to be reimbursed to the Company or any of its Subsidiaries by an insurance policy (subject to any deductible or retention);
(xviil) other than in the ordinary course of business consistent with past practice, (i) make, revoke or change any material Tax election by Seller that could adversely impact the election, (ii) settle or finally resolve any Tax contest with respect to a material amount of Taxes due Tax, (iii) file any amended income or payable other material Tax Return that reflects a material increase in the tax liability of the Company, or (and/or iv) prepare or file any direct material Tax Return other than in a manner consistent in all material respects with past practice, (v) consent to any extension or indirect owner waiver of equity interests the limitation period applicable to any material Tax Return or any claim or assessment in Buyerrespect of a material amount of Taxes, (vi) after the Closing Dateenter into any closing agreement relating to any material Tax liability, or (vii) give or request any waiver of a statute of limitation with respect to any material Tax Return;
(xviiim) modifysell, lease, license, transfer, pledge, mortgage, encumber, grant or dispose of or enter into negotiations with respect to the disposition of any material assets of the Company, including the capital stock of Subsidiaries of the Company, other than (i) the sale of inventory in the ordinary course of business, (ii) the disposition of used, obsolete or excess equipment in the ordinary course of business, (iii) other dispositions in the ordinary course of business, (iv) any Permitted Liens or (v) pursuant to any Contract existing and in effect as of the date hereof, true and complete copies of which are contained in the Data Room;
(n) enter into any (i) Contract containing any “change of control” or similar provision that would be triggered by the transactions contemplated hereby, or (ii) Affiliate Transaction;
(o) subject to Section 3.3, except as required pursuant to Contracts in effect prior to the date hereof or any Benefit Plan in effect prior to the date hereof, or as otherwise required by applicable Law and, at any time after April 30, 2012, awards under the Stock Plan consistent with past practice, (i) grant or provide any severance or termination payments or material benefits to any existing or former director, officer employee or consultant of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of or pay any bonus to any current or former director, officer, employee or consultant of the Company or any of its Subsidiaries other than with respect to non-executive employees and in the ordinary course, in each case consistent with past practice, or make any new equity awards to any current or former director, officer, employee or independent contractor of the Company or any of its Subsidiaries, (iii) establish, adopt, amend or terminate any Benefit Plan or arrangement that would be a Benefit Plan if in effect as of the date of this Agreement, or amend the terms of any outstanding equity-based awards, (iv) take any action to accelerate the vesting or payment, or fund or in any other than pursuant way secure the payment of compensation or benefits under any Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the expiration manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (vi) forgive any loans to any current or former directors, officers, employees or independent contractors of the Company or any of its term other than as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunder;
(xix) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property;
(xx) commence, settle or compromise any Proceeding;
(xxi) cancel, materially reduce or fail to maintain any insurance policy;
(xxii) change or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;
(xxiii) engage in any transaction with any Related PartiesSubsidiaries; or
(xxivp) agree, authorize or enter into commit to do any agreement, commitment or understanding (whether written or oral) with respect to of the foregoing.
Appears in 1 contract
Sources: Merger Agreement (Golfsmith International Holdings Inc)
Interim Operations. (a) From the date hereof of this Agreement until the earlier applicable Closing, except with the prior written consent of the Closing Purchaser (which consent may not be unreasonably withheld, delayed or termination of conditioned), as otherwise expressly required or contemplated by this Agreement or any other Transaction Agreement, as required by applicable Law or Order, or as set forth on Schedule 5.1(a), each of the Acquired Companies, the Seller shall and each other member of the Seller Group shall: (i) operate conduct the Business and use and/or hold for use the Acquired Assets only in the Ordinary Course of Business, including maintaining appropriate service levels, and in material compliance with all applicable Law including any COVID-19 MeasuresLaws and Orders; and (ii) use commercially reasonable efforts Reasonable Efforts to (A) maintain and preserve intact the business organization and goodwill of the Business, the Assets Business and the Assumed LiabilitiesAcquired Assets, (B) maintain satisfactory relationships its rights and franchises with Seller’s clients, operators, distributors, customers, insurance underwriters respect to the Business and other third parties having business dealings with Sellerthe condition of the Acquired Assets (except for ordinary wear and tear), (C) pay its debts maintain the Business’ goodwill and Taxes when due existing relationships with customers, suppliers and distributors and any other Persons with whom it has a significant business relationship and retain license, permits, authorizations, franchises and certifications (subject to good faith disputes regarding such debts including the Applicable Governmental Authorizations), and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits its legal existence; and (Eiii) maintain good relations withpay all accounts payable of the Business, and keep available the services of, collect all accounts receivable of the Business Employeesand make any capital expenditures only in the Ordinary Course.
(b) Without limiting the generality of the foregoing, from the date of this Agreement until the applicable Closing, except as set forth in Section 5.1(b) with the prior written consent of the Disclosure SchedulePurchaser (which consent may not be unreasonably withheld, delayed or conditioned), as expressly permitted otherwise required or contemplated by this Agreement or any other Transaction Agreement, as approved in writing required by ▇▇▇▇▇applicable Law or Order, from or as set forth on Schedule 5.1(b), the date hereof until Acquired Companies and, only as with respect to the earlier Business, the Seller and the members of the Closing or the termination of this AgreementSeller Group, Seller shall not take any action which would require disclosure on Section 2.8 of the Disclosure Schedule orfollowing actions:
(i) take alter the remuneration, benefits or omit to take terms of employment of any action that results or may reasonably be expected to result in any employee of the representations and warranties Business other than (A) as required by Law or Order, or (B) pursuant to any Seller Benefit Plan of the Seller or the Beneficial Owners set forth herein being or becoming untrue Seller Group as in any material respect or in any of effect on the conditions set forth herein not being satisfieddate hereof;
(ii) amend other than with respect to individuals that have accepted or otherwise change have been provided employment offers prior to the organizational documents date hereof, hire or assign to any Acquired Company any Employees of Sellerthe Business or engage any independent contractors with respect to the Business; provided that any such employees the Purchaser consents to the hiring by or assignment to an Acquired Company shall be deemed to be included on Schedule 10.8(a)(ii);
(iii) (A) authorize, issue, sell or transfer any membership interests or other securities of Seller, (B) adjust, split, combine or reclassify or otherwise amend the terms of any membership interest or other security of Seller, (C) declare, authorize, set aside make or pay any dividend or other distribution (whether in cash, stock or other property) or (D) enter into any agreement with respect to the voting Acquired Companies, acquire (including by merger, consolidation or acquisition of stock or assets) any entity, business or material portion of the assets of any equity of SellerPerson;
(iv) (A) merge with respect to the Acquired Companies, adopt a plan to, in whole or part, liquidate, dissolve, merge, consolidate with any other Person, acquire any business or assets of any other Person (whether by merger, stock purchase, asset purchase or other business combination), other than recapitalize the purchase of supplies in the Ordinary Course of Business or (B) form any new SubsidiaryAcquired Companies;
(v) other than as permitted pursuant to subsection (vi) below, sell, lease, exchange, mortgage, pledge, transfer or otherwise dispose of any Acquired Assets or any interest therein, except for: (A) materially change sales of Inventory in the operation of the Business, Assets Ordinary Course or the Assumed Liabilities other immaterial sales or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement dispositions; or (B) enter into a new line products and services sold or assets otherwise disposed of business or abandon or discontinue an existing line of businessin the Ordinary Course;
(vi) make any loanslicense, advances or capital contributions totransfer, assign, or investments in, subject to any Person (Encumbrance any material Intellectual Property Asset other than advances of expenses Permitted Encumbrances, except for non-exclusive licenses to Business Employees Intellectual Property granted in the Ordinary Course Course; or take any action that would reasonably be likely to result in the loss, lapse, abandonment, invalidity or unenforceability of Business)any such material Intellectual Property;
(vii) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on or otherwise encumber any Assets, other than in the Ordinary Course of Business;
(ix) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Sellerthe Acquired Companies, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur any Indebtedness for borrowed money for which the Purchaser or issue any debt securities or warrants or other rights to acquire debt securities of Seller the Acquired Companies would be responsible for repaying after the Initial Closing Date, or assume, guarantee or endorse, as an accommodation or otherwise, the endorse such obligations of any Person for Indebtedness or capital obligations, in the case of any of the foregoing;
(xii) cancel any debts owed to or claims held by Seller in excess of $35,000;
(xiii) abandon, disclaim, dedicate to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreement;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any other Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;
(xv) revalue any of the assets of the Seller, except as required by GAAP, or enter into, or permit any of the assets of the Seller Acquired Assets to become bound by subject to any Contract that is or would constitute a Material ContractEncumbrance, other than Permitted Encumbrances;
(xviviii) (A) change any method of accounting or accounting practicewaive, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Business;
(xvii) make, revoke or change any Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date;
(xviii) modify, amend or terminate (other than pursuant to the expiration of its term other than as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunderClaims of the Acquired Companies, or to the extent otherwise constituting, relating to or arising from the Acquired Assets or Assumed Liabilities;
(xixix) fail settle or compromise, or agree to pay the entry of any required maintenance Order in respect of, any Claim or Legal Proceeding involving any of the Acquired Assets or Assumed Liabilities or the Acquired Companies other similar fees than settlements, compromises and Orders which are immaterial or otherwise fail to make required filings which do not impose any material limitations on the conduct or payments required to maintain and further prosecute operation of the Business or include any applications for registration payment obligations that would be binding on a member of Owned Intellectual Property the Purchaser Group or otherwise abandon, let lapse or fail to protect any Owned Intellectual Propertythe Acquired Companies following the applicable Closing;
(xxx) commence, settle make any new commitment for capital expenditures in excess of $500,000 or compromise increase any Proceedingprevious commitment for capital expenditures by greater than $500,000;
(xxixi) cancelenter into any Contract (A) with respect to which an Acquired Company or the Business that has any Liability or obligation involving more than $50,000, materially reduce contingent or fail to maintain otherwise, (B) which may place any insurance policymaterial limitation on the method of conducting or scope of the Business, or (C) which would otherwise be considered a Material Contract, in each case other than customer or vendor Contracts entered into in the Ordinary Course;
(xxiixii) issue, sell, pledge, grant, transfer, encumber or otherwise dispose of any shares of capital stock or other equity securities of the Acquired Companies, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock or other equity securities of the Acquired Companies or any stock appreciation rights, restricted stock units, stock-based performance units, “phantom” stock awards or other rights that are linked to the value of the common stock or the value of the Acquired Companies or any part thereof;
(xiii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of capital stock or securities convertible or exchangeable into or exercisable for any shares of capital stock of the Acquired Companies;
(xiv) make any amendment to any of the Acquired Companies’ respective certificates of incorporation, operating agreements or any other organizational and governance documents;
(xv) change its method of management or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities operations in any material respect;
(xxiiixvi) engage modify (including any extension greater than two (2) years) or amend in any transaction material respect, or cancel or terminate, any Material Contact, any other existing Contract material to an Acquired Company or the Business, or any Seller Benefit Plan;
(xvii) make any material change in its accounting practices or procedures;
(xviii) (A) file or make any change to any material Tax election relating solely to an Acquired Company on a stand-alone basis, change any annual Tax accounting period relating solely to an Acquired Company on a stand-alone basis, or adopt or change any method of Tax accounting relating solely to an Acquired Company on a stand-alone basis (except, in each case, as required by applicable Law or to conform to changes in applicable accounting rules), (B) file or amend any income or other material Tax Return of an Acquired Company on a stand-alone basis in a manner inconsistent with prior practice, unless such Tax Return has been made available to the Purchaser for review within a reasonable period prior to the due date for filing and the Seller has considered in good faith any Related Partiescomments thereto provided promptly by the Purchaser after delivery of such Tax Return to the Purchaser, or (C) enter into any closing agreement, settle any Tax claim, audit or assessment or surrender any right to claim Tax refund, offset or other reduction in Tax liability, in each case only with respect to a Tax Return filed or to be filed by or on behalf of an Acquired Company on a stand-alone basis;
(xix) modify in any material respect the websites or Business-related content therein, hosted at the internet domain names set forth on Schedule 3.8(b)(ii) of the Seller Disclosure Schedule (or transferred to an Acquired Company after the date hereof in accordance with Section 5.11(g)), other than in the Ordinary Course;
(xx) change customer pricing or offer any rebates, discounts or promotions, other than in the Ordinary Course;
(xxi) take any other action which would reasonably be expected to have a Material Adverse Effect; or
(xxivxxii) authorize authorize, commit or enter into agree to do any agreement, commitment or understanding (whether written or oral) with respect to of the foregoing.
(c) Notwithstanding anything to the contrary in Sections 5.1(a) and (b) above, prior to the Initial Closing, the Acquired Companies are permitted (i) to transfer, assign, discharge or otherwise settle all intercompany accounts with members of the Seller Group and their Affiliates, (ii) to distribute the net cash held by the Acquired Companies as a dividend, reduction of share capital or any other form of return of funds to their respective shareholders, (iii) to contribute cash or property to the share capital of an Acquired Company or in exchange for additional shares of stock of an Acquired Company, (iv) to incur intercompany debt in connection with the settlement of intercompany accounts, and (v) to otherwise engage in intercompany transactions involving the Acquired Companies and members of the Seller Group and their Affiliates to facilitate the matters contemplated by Section 5.3.
Appears in 1 contract
Interim Operations. (a) From The Company shall, and shall cause each of its Subsidiaries to, from and after the date hereof until the earlier execution and delivery of this Agreement and prior to the Closing (unless Purchaser shall otherwise approve in writing (such approval not to be unreasonably conditioned, withheld or termination of this Agreement, Seller shall (i) operate the Business only in the Ordinary Course of Business, including maintaining appropriate service levelsdelayed)), and in compliance with applicable Law including any COVID-19 Measures; and (ii) use commercially reasonable efforts to (A) maintain and preserve intact the business organization and goodwill of the Business, the Assets and the Assumed Liabilities, (B) maintain satisfactory relationships with Seller’s clients, operators, distributors, customers, insurance underwriters and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services of, the Business Employees.
(b) Without limiting the generality of the foregoing, except as set forth in Section 5.1(b) of the Disclosure Schedule, as otherwise expressly required or permitted by this Agreement or as required by applicable Law or requested by a Governmental Authority, conduct its business in all material respects in the Ordinary Course of Business and, to the extent consistent therewith, shall use and cause each of its Subsidiaries to use their respective commercially reasonable efforts to maintain its and its Subsidiaries’ relations and goodwill with key Governmental Authorities, customers, suppliers, licensors, licensees, distributors, creditors, lessors, employees, agents and business associates. Without limiting the generality of and in furtherance of the foregoing sentence, from the execution and delivery of this Agreement until the Closing, except as otherwise expressly required or permitted by this Agreement, required by applicable Law or requested by a Governmental Authority, as approved in writing by ▇▇▇▇▇Purchaser (such approval not to be unreasonably conditioned, from withheld or delayed) or set forth in the date hereof until the earlier corresponding subsection of Section 5.7(a) of the Closing Company Disclosure Letter, neither the Company nor any of its Subsidiaries shall, directly or the termination of this Agreement, Seller shall not take any action which would require disclosure on Section 2.8 of the Disclosure Schedule orindirectly:
(i) take adopt or omit to take propose any action that results or may reasonably be expected to result change in any of the representations and warranties of Seller or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfiedits Organizational Documents;
(ii) amend or otherwise change the organizational documents number of Sellerdirectorships that constitute the Company Board as of the date of this Agreement or present a slate of directors to the Company Shareholders for election that is greater than or fewer than the number of directors that constitute the Company Board as of the date of this Agreement;
(iii) (A) authorizemerge or consolidate the Company or any of its Subsidiaries with any other Person, issueexcept for any such transactions solely among Wholly Owned Subsidiaries of the Company, sell or transfer any membership interests restructure, reorganize or other securities of Seller, (B) adjust, split, combine completely or reclassify partially liquidate or otherwise amend the terms of any membership interest or other security of Seller, (C) declare, authorize, set aside make or pay any dividend or other distribution (whether in cash, stock or other property) or (D) enter into any agreement with respect to the voting of any equity of Selleragreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iv) (A) merge or consolidate with any other Person, acquire any business or assets outside of the Ordinary Course of Business from any other Person with a fair market value (whether reasonably determined by mergerthe Company) or purchase price in excess of, stock purchaseor (B) make any loans, asset advances, guarantees or capital contributions to or investments in any Person (other than to or from the Company and any of its Wholly Owned Subsidiaries) in excess of $5,000,000 in any individual transaction or series of related transactions or $25,000,000 in the aggregate (it being understood that such aggregate limitation shall apply to all transactions contemplated by either clause (A) or (B)), in each case, including any amounts or value reasonably expected to be paid in connection with a future earn-out, purchase price adjustment, release of “holdback” or other business combination)similar contingent payment obligation, or that would reasonably be expected to prevent or materially impair the ability of the Company to consummate the transactions contemplated by this Agreement prior to the Outside Date, other than the purchase acquisitions of supplies inventory or other goods in the Ordinary Course of Business pursuant to the terms of a Contract binding on the Company or (B) form any new Subsidiaryof its Subsidiaries in effect as of the date of this Agreement or entered into following the date of this Agreement in accordance with the terms of this Section 5.7;
(v) (A) materially change the operation of the Businessissue, Assets or the Assumed Liabilities or any method of purchasesell, salepledge, leasedispose of, managementgrant, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of business;
(vi) make any loans, advances or capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of Business);
(vii) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guarantee, sellEncumber, mortgage, pledge, dispose of or incur any Lien on or otherwise encumber enter into any AssetsContract or other agreement, understanding or arrangement with respect to the voting of, any shares in the capital of the Company (including the Common Shares) or of any of its Subsidiaries, securities convertible or exchangeable into or exercisable for any such shares, or any options, warrants or other rights of any kind to acquire any such shares or such convertible or exchangeable securities (other than the (A) issuance of shares by a Wholly Owned Subsidiary of the Company to the Company or another Wholly Owned Subsidiary of the Company, (B) issuance of Common Shares in respect of Company Options outstanding as of the date of this Agreement or granted pursuant to clause (C), in each case, in accordance with their terms and, as applicable, the Stock Plans in effect on the date of this Agreement, (C) grant of up to 250,000 Company Options to employees (other than Executives) in the Ordinary Course of Business under the Stock Plans in effect as of the date of this Agreement (provided, however, that such Company Options shall not include any provisions regarding accelerated vesting in connection with a “change of control” (as defined in the applicable Stock Plan) or upon a termination of employment and the applicable award agreement shall clarify that any such provisions in the applicable Stock Plan do not apply to such Company Options), or (D) issuance of Common Shares pursuant to the terms and conditions of the Existing Warrants);
(vi) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its share capital or securities convertible or exchangeable into or exercisable for any shares of its share capital (including, with respect to the Company, for the avoidance of doubt, the Common Shares), other than the withholding of Common Shares to satisfy the payment of the exercise price or withholding Tax obligations upon the exercise of Company Options outstanding as of the date of this Agreement or granted in accordance with Section 5.7(a)(v), in each case, in accordance with their terms and, as applicable, the Stock Plans as in effect on the date of this Agreement;
(vii) incur any Indebtedness (including the issuance of any debt securities, warrants or other rights to acquire any debt security), except for
(A) Indebtedness for borrowed money incurred in the Ordinary Course of Business not to exceed $1,000,000 individually and $5,000,000 in the aggregate or to fund expenditures expressly permitted by Section 5.7(a)(iv),
(B) Indebtedness in replacement of existing Indebtedness for borrowed money on terms substantially consistent with or more favorable to the Company than the Indebtedness being replaced or (C) guarantees of Indebtedness of its Wholly Owned Subsidiaries otherwise incurred in compliance with this Section 5.7(a); provided that any Indebtedness that is extinguished in full prior to, or concurrently with, the Closing shall not be deemed to be a breach of this provision;
(viii) except as consistent with or reasonably related to, and not in excess of ten percent of the aggregate amounts of, with respect to the fiscal year ending December 31, 2018, the expenditures made in respect of the Company’s and its Subsidiaries’ operations during any one full month prior to the date of this Agreement for such fiscal year or the Company Budget (as applicable) or to the extent reasonably necessary to avoid a material business interruption as a result of any act of God, war, terrorism, earthquake, fire, hurricane, storm, flood, civil disturbance, explosion, partial or entire failure of utilities or information technology systems, or any other similar cause not reasonably within the control of the Company or its Subsidiaries, make or authorize any payment of, or accrual or commitment for, capital expenditures;
(ix) amend, supplement or otherwise modify any Company Budget, except for such amendments, supplements or other modifications to any Company Budget that would result in an increase of ten percent or less to the aggregate amounts set forth in any initial version of a Company Budget adopted by the Company Board;
(x) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement, other than Contracts with customers or suppliers entered into in the Ordinary Course of Business and, for the avoidance of doubt, any Contracts entered into in connection with an action expressly permitted by any of the Subsections of this Section 5.7(a), including any amendment, supplement or other modification to an existing Contract, which are governed by Section 5.7(a)(xi);
(xi) other than with respect to Material Contracts related to Indebtedness, which shall be governed by Section 5.7(a)(vii), or, for the avoidance of doubt as contemplated by Section 5.8(g), terminate or amend, modify, supplement or waive in a manner that is materially adverse to the Company and its Subsidiaries (taken as a whole), or assign, convey, Encumber or otherwise transfer (including pursuant to the division of a limited liability company), in whole or in part, material rights or interest pursuant to or in any Material Contract, other than (A) expirations of any such Contract in the Ordinary Course of Business, and (B) non-exclusive licenses, covenants not to ▇▇▇, releases, waivers or other rights under Intellectual Property Rights, in each case, granted in the Ordinary Course of Business;
(ixxii) acquire cancel, modify or waive any real property debts or undertake claims held by the Company or commit to undertake capital expenditures for the purchase any of equipment its Subsidiaries having in each case a value in excess of $1,000,000 individually or tangible assets exceeding $35,000 5,000,000 in the aggregate;
(xxiii) agree toamend any License contemplated by Schedule B6(b) in any material respect, request or adopt allow any such License to lapse, expire or terminate (A) any moratorium except where the lapse, expiration or suspension of payment termination of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official such License is with respect to Sellera License that has become obsolete, (C) an assignment for the benefit of creditors redundant or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any no longer required by applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (CLaw);
(xi) incur any Indebtedness or issue any debt securities or warrants or other rights to acquire debt securities of Seller or assume, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person for Indebtedness or capital obligations, in the case of any of the foregoing;
(xii) cancel any debts owed to or claims held by Seller in excess of $35,000;
(xiii) abandon, disclaim, dedicate to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreement;
(xiv) disclose any confidential amend, modify, terminate, cancel or proprietary information let lapse a material Insurance Policy, unless simultaneous with such termination, cancellation or confidential Business Intellectual Property lapse, replacement policies underwritten by insurance and reinsurance companies of internationally recognized standing are in full force and effect, in each case, providing coverage equal to any Personor greater than the coverage under the terminated, other than employees canceled or lapsed Insurance Policies for substantially similar premiums, as applicable, as in effect as of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives the date of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Sellerthis Agreement;
(xv) revalue other than with respect to Transaction Litigation, which shall be governed by Section 5.9, settle or compromise any Claim for an amount in excess of $500,000 individually or $2,000,000 in the aggregate during any calendar year, net of any amount covered by insurance, indemnification or existing reserves established in accordance with IFRS or any obligation or liability of it in excess of such amount or on a basis that would result in the imposition of any Order that would materially and adversely restrict the future activity or conduct of the Company or any of the assets its Subsidiaries or a finding or admission of the Sellera material violation of Law;
(xvi) make any changes with respect to accounting policies or procedures, except as required by GAAPchanges in IFRS;
(xvii) make, change or revoke any material Tax election, adopt or change any Tax accounting period, adopt or change any material Tax accounting method, file any amended Tax Return, enter intointo any closing agreement with respect to Taxes, settle or compromise any material Tax claim, audit, assessment, dispute or other proceeding, surrender any right to claim a refund of a material amount of Taxes, request any ruling from any Governmental Authority with respect to Taxes, agree to an extension or waiver of the statute of limitations with respect to material Taxes or take any action with respect to Taxes which would be reasonably expected to result in a material increase in the Tax obligation or liability of the Company or its Subsidiaries, or, in respect of any taxable period (or portion thereof) ending after the Closing Date, the Tax obligation or liability of Purchaser, Parent or any of their respective Subsidiaries;
(xviii) transfer, sell, divest or otherwise dispose of or transfer, or permit or suffer to exist the creation of any Encumbrance upon, any properties or assets (tangible or intangible, including any Intellectual Property Rights), product lines or businesses material to the Company and its Subsidiaries (taken as a whole), including the share capital of any of its Subsidiaries, other than (A) in the Ordinary Course of Business, (B) sales of obsolete assets, (C) with respect to assets with a fair market value (reasonably determined by the Company) not in excess of $1,000,000 individually or $5,000,000 in the Seller aggregate or (D) pursuant to become bound by the terms of any Contract that is or would constitute in effect as of the date of this Agreement and a Material Contractcopy of which has been made available to Purchaser prior to the date of this Agreement;
(xvixix) (A) change cancel, abandon or otherwise allow to lapse or expire any method Intellectual Property Rights that are owned by the Company or any of accounting its Subsidiaries and are material to the businesses of the Company and its Subsidiaries as currently conducted, except, solely with respect to Intellectual Property Rights that have reached their date of final expiration or accounting practiceare otherwise not material to the businesses of the Company and its Subsidiaries, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Business;
(xviixx) makeexcept as required pursuant to the terms of any Employee Plan in effect as of the date of this Agreement or as otherwise required by applicable Law, revoke (A) increase the compensation or benefits payable to any director, employee or individual independent contractor of the Company or its Subsidiaries, (B) become a party to, establish, adopt, amend or otherwise modify or commence participation in any Employee Plan, other than amendments to Employee Plans that are health and welfare plans in the Ordinary Course of Business, (C) pay or award, or commit to pay or award, any bonuses or incentive compensation, (D) enter into any employment or severance agreement (excluding offer letters that provide for no severance entitlements in excess of those required by applicable Law) with any director, officer, employee or individual independent contractor, other than the entry into a severance agreement in the Ordinary Course of Business upon the termination of employment of an employee who is not an Executive, (E) enter into any change in control or retention agreement with any Tax election by Seller that could adversely impact the amount of Taxes due director, officer, employee or payable individual independent contractor, (and/or any direct or indirect owner of equity interests in BuyerF) after the Closing Date;
(xviii) modifyestablish, adopt, enter into, amend or terminate any collective bargaining agreement, (G) take any action to accelerate the vesting or lapsing of restrictions or payment, or fund or in any other way secure the payment, of compensation or benefits under any Employee Plan, (H) terminate the employment or service of any employee or individual independent contractor who is an Executive, other than pursuant to the expiration of its term other than as a result of any action taken by Sellerfor cause, or other than as a result of a material breach by (I) hire any employee or individual independent contractor at the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunder;
(xix) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property;
(xx) commence, settle or compromise any ProceedingExecutive level;
(xxi) cancelengage in the production, materially reduce cultivation, marketing, distribution or fail sale of Cannabis or any products derived from or intended to maintain any insurance policy;be used in connection with Cannabis or services intended to relate to Cannabis in the United States to the extent such activities remain prohibited under applicable Law; or
(xxii) change agree, authorize or modify commit to do any of the Seller’s creditforegoing.
(b) Purchaser and Parent (i) shall not, collectionand shall cause its Subsidiaries not to, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect take or fail to pay take any actions that would, individually or delay payment in the aggregate, reasonably be expected to prevent or materially impair the consummation of payables or other Liabilities in any material respect;the transactions contemplated by this Agreement and (ii) shall comply with and satisfy the Parent Exclusivity Obligations.
(xxiiic) engage Nothing set forth in any transaction with any Related Parties; or
(xxiv) authorize this Agreement shall give Purchaser or enter into any agreementParent, commitment directly or understanding (whether written indirectly, the right to control or oral) with respect direct the Company’s or its Subsidiaries’ operations prior to the foregoingClosing or give the Company, directly or indirectly, the right to control or direct Purchaser’s, Parent’s or any of their respective Subsidiaries’ operations prior to the Closing.
Appears in 1 contract
Interim Operations. (a) From Between the date hereof until and the earlier Final Closing Date, the Sellers shall operate and carry on the Business (except to the extent a portion thereof has previously been transferred to Buyer or Eastern as of the Closing Date or termination of this Agreementprior Inventory Closing Date) only in the ordinary course and substantially as presently operated. Consistent with the foregoing, Seller the Sellers shall (i) operate keep and maintain the Business only Purchased Assets in the Ordinary Course of Businessgood operating condition and repair, including maintaining appropriate service levels, and in compliance with applicable Law including any COVID-19 Measuresnormal wear-and-tear excepted; and (ii) use their commercially reasonable efforts to (A) maintain and preserve intact the business organization and goodwill of the Businesssuppliers, the Assets and the Assumed Liabilitiescontractors, (B) maintain satisfactory relationships with Seller’s clientslicensors, operators, distributorsemployees, customers, insurance underwriters distributors and other others having business relations with the Business; (iii) maintain the Inventory at levels adequate and not excessive in the present circumstances of the Business and at levels reasonably based on past practices and historical sales of the Business; and (iv) maintain the Sellers’ current operating practices with respect to Patient Charges. In furtherance of the foregoing, the Sellers shall maintain normal operating hours, staffing levels, inventory levels and merchandise mix. For the avoidance of doubt, changes imposed or required by third parties having of a kind and nature typical for a company that has announced an intent to wind down its business dealings with Seller, or dissolve shall not be deemed to violate the terms of this Agreement (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, but may be included in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available any determination of the services of, the Business Employeesexistence of a Material Adverse Effect).
(b) Without limiting the generality of the foregoing, except as set forth in Section 5.1(b) of the Disclosure Schedule, Except as expressly permitted contemplated by this Agreement or as approved in writing by ▇▇▇▇▇except with the express written approval of Buyer, from the date hereof until the earlier of the Closing or the termination of this Agreement, Seller Sellers shall not take any action which would require disclosure on Section 2.8 of the Disclosure Schedule or:
not: (i) take or omit to take any action that results is intended or may reasonably be expected to result in (x) any of the representations and warranties of Seller or the Beneficial Owners set forth herein in this Agreement being or becoming untrue in any material respect or in respect, (y) any of the conditions to the Closing set forth herein in this Agreement not being satisfied;
satisfied or (iiz) amend or otherwise change the organizational documents of Seller;
(iii) (A) authorize, issue, sell or transfer any membership interests or other securities of Seller, (B) adjust, split, combine or reclassify or otherwise amend the terms violation of any membership interest or other security provision of Sellerthis Agreement, (C) declareexcept, authorizein each case, set aside make or pay any dividend or other distribution (whether in cash, stock or other property) or (D) enter into any agreement with respect to the voting of any equity of Seller;
(iv) (A) merge or consolidate with any other Person, acquire any business or assets of any other Person (whether by merger, stock purchase, asset purchase or other business combination), other than the purchase of supplies in the Ordinary Course of Business or (B) form any new Subsidiary;
(v) (A) materially change the operation of the Business, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply by applicable Requirements of Law; (ii) except in the ordinary course of business consistent with any Law or the terms of this Agreement or (B) past practice, enter into a new line any lease, agreement, Contract or commitment of any nature, oral or written, nor make any capital investment or expenditures, primarily related to the ownership or operation of the Operate Location Pharmacies, Worksite Pharmacies or Transfer Locations; (iii) except in the ordinary course of business or abandon or discontinue an existing line of business;
(vi) make consistent with past practice, enter into any loans, advances or capital contributions Contract with respect to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of Business);
(vii) (A) institute or announce make any increase in (or commitment to increase) the compensation, bonuses or other benefits compensation payable to any Business Employeesof its employees or agents primarily related to the Operate Location Pharmacies, Worksite Pharmacies or Transfer Locations; (Bprovided, that the foregoing shall not prohibit the granting of “stay-bonuses” or similar commitments) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (Eiv) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfersell, lease, license, guarantee, sell, mortgage, pledge, transfer or otherwise dispose of (including any transfers from any of the Sellers to any of their respective Affiliates), or incur impose or suffer to be imposed any Lien on or otherwise encumber Encumbrance on, any of the Purchased Assets, other than inventory and minor amounts of personal property sold or otherwise disposed of for fair value in the Ordinary Course of Business;
(ix) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing ordinary course of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency Business consistent with similar effect as any of the foregoing (A) through (C);
(xi) incur any Indebtedness or issue any debt securities or warrants or other rights to acquire debt securities of Seller or assume, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person for Indebtedness or capital obligations, in the case of any of the foregoing;
(xii) cancel any debts owed to or claims held by Seller in excess of $35,000;
(xiii) abandon, disclaim, dedicate to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreement;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;
(xv) revalue any of the assets of the Seller, except as required by GAAP, or enter into, or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contract;
(xvi) (A) change any method of accounting or accounting past practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Business;
(xvii) make, revoke or change any Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date;
(xviii) modify, amend or terminate (other than pursuant to the expiration of its term other than as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunder;
(xix) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property;
(xx) commence, settle or compromise any Proceeding;
(xxi) cancel, materially reduce or fail to maintain any insurance policy;
(xxii) change or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;
(xxiii) engage in any transaction with any Related Parties; or
(xxiv) authorize or enter into any agreement, commitment or understanding (whether written or oral) with respect to the foregoing.
Appears in 1 contract
Interim Operations. During the period from the date of this Agreement and continuing until the Closing:
(a) From the date hereof until the earlier of the Closing or termination of The Shareholder agrees (except as expressly contemplated by this Agreement, Seller including any Exhibits and Schedules hereto, or to the extent that Buyer shall otherwise consent in writing) that as to the Company:
(i1) operate the Business only The Company shall carry on its business in the Ordinary Course of Businessusual, including maintaining appropriate service levelsregular and ordinary course in substantially the same manner as heretofore conducted and, and in compliance to the extent consistent with applicable Law including any COVID-19 Measures; and (ii) such business, use commercially all reasonable efforts to (A) maintain preserve intact its present business organization, keep available the services of its present officers and employees and preserve intact the business organization and goodwill of the Business, the Assets and the Assumed Liabilities, (B) maintain satisfactory its relationships with Seller’s clients, operators, distributors, customers, insurance underwriters suppliers and other third parties others having business dealings with Sellerit;
(2) The Company shall not and shall not propose to: (a) declare, set aside or pay any dividend, on, or make other distributions in respect of, any of its capital stock, or purchase or redeem any shares of its capital stock other than a cash dividend to be distributed to the Shareholder in an amount equal to the Shareholder's liability for federal and state taxes on the earnings from operations of the Company during 1998 through the Closing Date (Cexclusive -26- 34 of any income or gain on sale associated with the transactions covered by this Agreement) pay as more fully described at Section 5.4 hereafter; (b) split, combine or reclassify any of its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay capital stock or performissue, authorize or propose the issuance of any other securities in respect of, in all material respectslieu of or in substitution for shares of its capital stock; (c) redeem, other obligations when due, repurchase or otherwise acquire any shares of its capital stock; or (Dd) maintain in effect all Permits and (E) maintain good relations with, and keep available the services of, the Business Employeesotherwise change its capitalization.
(b3) Without limiting Except as contemplated by this Agreement, the generality Company shall not sell, issue, pledge, authorize or propose the sale or issuance of, pledge or purchase or propose the purchase of, any shares of its capital stock of any class or securities convertible into, or rights, warrants or options to acquire, any such shares or other convertible securities.
(4) The Company shall not amend its certificate of incorporation or its Bylaws.
(5) The Company shall not sell, lease, pledge, encumber or otherwise dispose of or agree to sell, lease, pledge, encumber or otherwise dispose of, any of its assets that are material or any other assets except in the ordinary course of business consistent with prior practice and in no event amounting in the aggregate to more than $25,000.
(6) The Company shall not incur any indebtedness for borrowed money or guarantee any such indebtedness or issue or sell any debt securities of the Company or guarantee any debt securities of others other than in the ordinary course of business consistent with prior practice and in no event amounting in the aggregate to more than $25,000.
(7) The Company shall not adopt or amend in any material respect any collective bargaining agreement or Employee Benefit Plan.
(8) The Company shall not grant to any executive officer any increase in compensation or in severance or termination pay, or enter into any employment agreement with any executive officer.
(9) The Company shall not acquire (by merger, consolidation or acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or subdivision thereof, or make any investment by either purchase of stock or securities, contributions to capital, property transfer or, except in the ordinary course of business, purchase of any property or assets, of any other individual or entity.
(10) The Company shall not make any material tax election or settle or compromise any material federal, state, local or foreign tax liability.
(11) The Company shall not waive, release, grant or transfer any rights of material value or modify or change in any material respect any Material Contract other than in the ordinary course of business and consistent with past practice.
(12) The Company shall not enter into any agreement or arrangement to do any of the foregoing, except as set forth in Section 5.1(b) of the Disclosure Schedule, as expressly permitted by this Agreement or as approved in writing by ▇▇▇▇▇, from the date hereof until the earlier of the Closing or the termination of this Agreement, Seller . The Company shall not take any action which would require disclosure on Section 2.8 of the Disclosure Schedule or:
(i) take action, or omit fail to take any action action, that results or may is reasonably be expected likely to result in any of the representations and warranties of Seller or the Beneficial Owners Company set forth herein being or in this Agreement becoming untrue in any material respect respect.
(b) Buyer agrees (except as expressly contemplated by this Agreement, including any Exhibits and Schedules hereto, or to the extent that the Shareholder shall otherwise consent in writing or to the extent required to permit Buyer to meet its obligations under this Section 5) that:
(1) Buyer shall carry on its business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted and, to the extent consistent with such business, use all reasonable efforts to preserve intact its present business organization (provided that such obligation shall not relate to the officers and employees of Buyer or any of the conditions set forth herein not being satisfied;its subsidiaries) and preserve its relationships with customers, suppliers and others having business dealings with it.
(ii2) amend As part of its overall business strategy, Buyer is presently in negotiations with other companies that may be suitable acquisition targets. Buyer may, therefore, make one or otherwise change more acquisitions prior to the organizational documents Closing, and in connection therewith, may be caused to issue additional securities, of Seller;whatever nature and number, in connection with such acquisitions. In addition, Buyer may also be caused to issue additional securities, of whatever nature and number, in connection with certain private placement transactions which may be undertaken between the date hereof and the Closing.
(iii3) Buyer shall not (and shall not propose to) (Aa) authorizedeclare or pay any dividend, issueon, sell or transfer make other distributions in respect of, any membership interests or other securities of Sellerits capital stock, (Bb) adjust, split, combine or reclassify any of its capital stock or issue, authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, (c) repurchase or otherwise amend the terms acquire any shares of any membership interest or other security of Seller, (C) declare, authorize, set aside make or pay any dividend or other distribution (whether in cash, its capital stock or (d) otherwise change its capitalization.
(4) Buyer shall not sell, lease, pledge, encumber or otherwise dispose of, or agree to sell, lease, pledge, encumber or otherwise dispose of, any of its assets that are material, or any other propertyassets except in the ordinary course of business consistent with prior practice.
(5) Buyer shall not adopt or amend in any material respect any collective bargaining agreement or Employee Benefit Plan (Das defined herein).
(6) Buyer shall not enter into any agreement with respect or arrangement to the voting of any equity of Seller;
(iv) (A) merge or consolidate with any other Person, acquire any business or assets of any other Person (whether by merger, stock purchase, asset purchase or other business combination), other than the purchase of supplies in the Ordinary Course of Business or (B) form any new Subsidiary;
(v) (A) materially change the operation of the Business, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of business;
(vi) make any loans, advances or capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of Business);
(vii) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on or otherwise encumber any Assets, other than in the Ordinary Course of Business;
(ix) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur any Indebtedness or issue any debt securities or warrants or other rights to acquire debt securities of Seller or assume, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person for Indebtedness or capital obligations, in the case of do any of the foregoing;
(xii) cancel . Buyer shall not take any debts owed to or claims held by Seller in excess of $35,000;
(xiii) abandonaction, disclaim, dedicate to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreement;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;
(xv) revalue any of the assets of the Seller, except as required by GAAP, or enter into, or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contract;
(xvi) (A) change any method of accounting or accounting practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Business;
(xvii) make, revoke or change any Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date;
(xviii) modify, amend or terminate (other than pursuant to the expiration of its term other than as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunder;
(xix) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect take any Owned Intellectual Property;
(xx) commenceaction, settle or compromise any Proceeding;
(xxi) cancel, materially reduce or fail that is reasonably likely to maintain any insurance policy;
(xxii) change or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) result in any material respect or fail to pay or delay payment of payables or other Liabilities their representations and warranties set forth in this Agreement becoming untrue in any material respect;
(xxiii) engage in any transaction with any Related Parties; or
(xxiv) authorize or enter into any agreement, commitment or understanding (whether written or oral) with respect to the foregoing.
Appears in 1 contract
Interim Operations. (a) From Except (i) as described in Section 5.1(a) of the Company Disclosure Letter, (ii) as otherwise expressly required by this Agreement or any other Transaction Document (including in connection with the Private Placements), (iii) as required by applicable Law or COVID-19 Measures or (iv) as Parent shall otherwise consent to in writing (which consent shall not be unreasonably withheld, conditioned, delayed, or denied), the Company covenants and agrees as to itself and its Subsidiaries that, during the period from the date hereof of this Agreement until the Closing, or the earlier of the Closing or termination of this AgreementAgreement in accordance with its terms, Seller the Company shall (iA) operate the Business only its business in the Ordinary Course ordinary course of Business, including maintaining appropriate service levels, and in compliance business consistent with applicable Law including any COVID-19 Measures; past practice and (iiB) use commercially reasonable efforts to (A) maintain and preserve intact the its business organization organization, assets, properties and goodwill of the Business, the Assets and the Assumed Liabilities, (B) maintain satisfactory relationships with Seller’s clients, operators, distributors, customers, insurance underwriters and other third parties having material business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services of, the Business Employeesrelations.
(b) Without limiting the generality of of, and in furtherance of, the foregoing, from the date of this Agreement until the Closing or the earlier termination of this Agreement in accordance with its terms, except (v) as set forth described in the corresponding subsection of Section 5.1(b) of the Company Disclosure ScheduleLetter, (w) as otherwise expressly permitted required by this Agreement or any Transaction Document, (x) as approved required by applicable Law or COVID-19 Measures or (y) as Parent shall otherwise consent to in writing by ▇▇▇▇▇, from the date hereof until the earlier of the Closing or the termination of this Agreement, Seller (which consent shall not take any action which would require disclosure on Section 2.8 of be unreasonably withheld, conditioned, delayed or denied), the Disclosure Schedule orCompany will not and will not permit its Subsidiaries to:
(i) take adopt or omit to take propose any action that results change in its or may reasonably be expected to result in any of the representations and warranties of Seller or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfiedits Subsidiaries’ Organizational Documents;
(ii) amend (A) merge or otherwise change consolidate itself or any of its Subsidiaries with any other Person, except for transactions among its wholly owned Subsidiaries or (B) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the organizational documents of SellerCompany or its Subsidiaries;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of $200,000, or acquire any business or entity (whether by merger or consolidation, by purchase of substantially all assets or equity interests or by any other manner), in each case, in any transaction or series of related transactions, other than acquisitions or other transactions pursuant to Contracts to which the Company or any of its Subsidiaries are a party that are in effect as of the date of this Agreement;
(iv) sell, lease, license or otherwise dispose of any of its material assets or properties (other than Intellectual Property), except (A) authorizefor sales, leases, licenses or other dispositions in the ordinary course of business and (B) for sales, leases, licenses or other dispositions of assets and properties with a fair market value not in excess of $150,000 in the aggregate;
(v) except pursuant to awards granted under the Company’s Stock Plan in the ordinary course of business and in accordance with the terms of the Stock Plan as of the date of this Agreement, or in connection with the Company Warrant Settlement or the Preferred Stock Conversion, issue, sell sell, grant or transfer authorize the issuance, sale or grant of any membership interests shares of capital stock or other securities of Sellerthe Company or any of its Subsidiaries (other than issuances by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company), or any options, warrants, convertible securities, subscription rights or other similar rights entitling its holder to receive or acquire any shares of such capital stock or other securities of the Company or any of its Subsidiaries;
(Bvi) adjustreclassify, split, combine combine, subdivide, redeem or reclassify repurchase, any capital stock of the Company or otherwise amend options, warrants or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except in connection with the terms net exercise or settlement of any membership interest awards, repurchases of unvested shares subject to early-exercised Company Options under the Company’s Stock Plan or other security of Seller, in connection with the Company Warrant Settlement or the Preferred Stock Conversion;
(Cvii) declare, authorizeset aside, set aside make or pay any dividend or other distribution (whether distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or other property) or (D) enter into any agreement with respect to the voting of any equity of Sellerits capital stock;
(ivviii) (A) merge make any loans, advances, guarantees or consolidate with capital contributions to or investments in any other Person, acquire any business or assets of any other Person (whether by merger, stock purchase, asset purchase other than the Company or other business combinationany direct or indirect wholly-owned Subsidiary of the Company), other than the purchase of supplies in the Ordinary Course of Business or (B) form any new Subsidiary;
(v) (A) materially change the operation of the Business, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line ordinary course of business;
(vi) make any loans, advances or capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of Business);
(vii) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on or otherwise encumber any Assets, other than in the Ordinary Course of Business;
(ix) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur any Indebtedness for borrowed money or guarantee any such Indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt securities security of Seller the Company or assumeany of its Subsidiaries, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person except for Indebtedness for borrowed money incurred in the ordinary course of business not to exceed $150,000 in the aggregate;
(x) make or commit to make capital obligationsexpenditures other than in an amount not in excess of $350,000, in the case aggregate;
(xi) enter into any Contract that would have been a Company Material Contract had it been entered into prior to the date of any this Agreement, other than in the ordinary course of the foregoingbusiness;
(xii) cancel amend or modify in any debts owed to material respect or terminate any Company Material Contract, or waive or release any material rights, claims held by Seller or benefits under any Company Material Contract, in excess each case, other than in the ordinary course of $35,000business;
(xiii) abandonmake any material changes with respect to its accounting policies or procedures, disclaim, dedicate to the public, sell, assign except as required by changes in Law or grant any security interest in, to or under any Business Intellectual Property or Business IP AgreementGAAP;
(xiv) disclose settle any confidential Proceeding, except in the ordinary course of business or proprietary information where such settlement is covered by insurance or confidential Business Intellectual Property to any Person, other involves only the payment of monetary damages in an amount not more than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with $200,000 in the Selleraggregate;
(xv) revalue any except in the ordinary course of the assets of the Seller, except as required by GAAP, or enter into, or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contract;
(xvi) (A) change any method of accounting or accounting business consistent with past practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s booksfile any material amended Tax Return, accounts and records in the Ordinary Course of Business;
(xvii) make, revoke or change any material Tax election in a manner inconsistent with past practice, adopt or change any material Tax accounting method or period, enter into any agreement with a Governmental Entity with respect to material Taxes, settle or compromise any examination, audit or other action with a Governmental Entity of or relating to any material Taxes or settle or compromise any claim or assessment by Seller a Governmental Entity in respect of material Taxes, or enter into any Tax sharing or similar agreement (excluding any commercial contract not primarily related to Taxes), in each case, to the extent such action could reasonably be expected to have any adverse and material impact on Parent;
(xvi) except in the ordinary course of business or pursuant to the terms of any Company Benefit Plan in effect as of the date of this Agreement or as required by Law, (A) increase the annual salary or consulting fees or target annual cash bonus opportunity, of any Company Employee with an annual salary or consulting fees and target annual cash bonus opportunity in excess of $200,000 as of the date of this Agreement, (B) become a party to, establish, adopt, amend, or terminate any material Company Benefit Plan or any arrangement that could adversely impact would have been a material Company Benefit Plan had it been entered into prior to this Agreement, (C) take any action to accelerate the amount vesting or lapsing of Taxes due restrictions or payable payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Benefit Plan, (and/or D) forgive any direct loans or indirect owner issue any loans (other than routine travel advances issued in the ordinary course of equity interests business) to any Company Employee, (E) hire any employee or engage any independent contractor (who is a natural person) with annual salary or consulting fees and target annual cash bonus opportunity in Buyerexcess of $200,000 or (F) after terminate the Closing Dateemployment of any employee of the Company who would be an “executive officer” (as defined in Rule 3b-7 of the Exchange Act) other than for cause;
(xvii) sell, assign, lease, exclusively license, pledge, encumber, divest, abandon, or allow to lapse any material Company Intellectual Property, other than grants of non-exclusive licenses in the ordinary course of business to customers for use of the products or services of the Company or otherwise in the ordinary course of business;
(xviii) modifybecome a party to, amend establish, adopt, amend, commence participation in or terminate (other than pursuant to the expiration of its term other than as a result of enter into any action taken by Seller, collective bargaining or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunderlabor union Contract;
(xix) fail to pay use commercially reasonable efforts to keep current and in full force and effect, or to comply with the requirements of, or to apply for or renew, any required maintenance permit, approval, authorization, consent, license, registration or other similar fees or otherwise fail certificate issued by any Governmental Entity that is material to make required filings or payments required to maintain the conduct of the business of the Company and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandonits Subsidiaries, let lapse or fail to protect any Owned Intellectual Propertytaken as a whole;
(xx) commence, settle file any prospectus supplement or compromise registration statement or consummate any Proceedingoffering of securities that requires registration under the Securities Act or that includes any actual or contingent commitment to register such securities under the Securities Act in the future;
(xxi) cancel, materially reduce or fail to maintain maintain, cancel or materially change coverage under, in a manner materially detrimental to the Company or any of its Subsidiaries, any insurance policypolicy maintained with respect to the Company and its Subsidiaries and their assets and properties;
(xxii) change or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in enter into any material respect or fail to pay or delay payment new line of payables or other Liabilities in any material respect;business outside of the business currently conducted by the Company and its Subsidiaries as of the date of this Agreement; or
(xxiii) engage in any transaction with any Related Parties; or
(xxiv) authorize or enter into any agreementContract, commitment or understanding (whether written otherwise become obligated, to do, or oral) with respect to authorize, any of the foregoing.
Appears in 1 contract
Interim Operations. (a) From After the date hereof until the earlier of and prior to the Closing (unless the Representative shall otherwise approve in writing, such approval not to be unreasonably withheld or termination of delayed, and except as otherwise expressly contemplated by this Agreement, Seller and except as required by applicable Laws), the Company shall, and shall (i) operate cause its Subsidiaries to, conduct the Business only business of the Company and its Subsidiaries in the Ordinary Course of Businessordinary and usual course and, including maintaining appropriate service levelsto the extent consistent therewith, the Company shall and in compliance with applicable Law including any COVID-19 Measures; and shall cause the Company’s Subsidiaries to (iix) use commercially their respective reasonable best efforts to (A) preserve the Company’s and its Subsidiaries’ business organizations intact and maintain and preserve intact the business organization existing relations and goodwill of the Businesswith all Governmental Entities, the Assets and the Assumed Liabilitiescustomers, (B) maintain satisfactory relationships with Seller’s clients, operatorssuppliers, distributors, customerscreditors, insurance underwriters lessors, employees and other third parties having business dealings with Sellerassociates, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (Ey) maintain good relations with, and keep available the services of, of the Business Employees.
(b) Company’s and its Subsidiaries’ present employees and agents. Without limiting the generality of the foregoing, except as set forth foregoing and in Section 5.1(b) of the Disclosure Schedule, as expressly permitted by this Agreement or as approved in writing by ▇▇▇▇▇furtherance thereof, from the date hereof of this Agreement until the earlier of the Closing or the termination of Closing, except (A) as otherwise expressly contemplated by this Agreement, Seller shall not take any action which would require disclosure on Section 2.8 of the Disclosure Schedule or:
(i) take or omit to take any action that results or may reasonably be expected to result in any of the representations and warranties of Seller Purchase Agreement or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfied;
(ii) amend or otherwise change the organizational documents of Seller;
(iii) (A) authorize, issue, sell or transfer any membership interests or other securities of SellerLetter Agreement, (B) adjust, split, combine as the Representative may approve in writing (such approval not to be unreasonably withheld or reclassify delayed) or otherwise amend the terms of any membership interest or other security of Seller, (C) declarefor transactions set forth on Schedule 3.1, authorize, set aside make the Company will not and shall cause each of its Subsidiaries not to:
(a) adopt or pay propose any dividend change in its certificate of formation or limited liability company agreement or other distribution applicable governing instruments;
(whether in cashb) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(c) acquire any entity or business (including by way of merger, stock purchase, asset purchase or otherwise) from any other Person, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement and disclosed on the Schedules;
(d) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any LLC Interests or any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly-owned Subsidiary of the Company to the Company or another wholly-owned Subsidiary), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other propertyrights of any kind to acquire any LLC Interests or any shares of such capital stock or such convertible or exchangeable securities;
(e) create or incur any Encumbrance in excess of $5 million on any assets of the Company or any of its Subsidiaries;
(Df) make any loans, advances or capital contributions to or investments in any Person, other than non-material advances to vendors and employees in the ordinary course of business consistent with past practice;
(g) enter into any agreement with respect to the voting of its LLC Interests or declare, set aside, make or pay any equity distribution, or purchase, redeem or otherwise acquire any of Sellerits LLC Interests payable other than in cash, with respect to any of its LLC Interests;
(ivh) (A) merge reclassify, split or consolidate with combine, directly or indirectly, any other Person, acquire any business or assets of any other Person (whether by merger, stock purchase, asset purchase or other business combination), other than the purchase of supplies in the Ordinary Course of Business or (B) form any new Subsidiaryits LLC Interests;
(vi) (A) materially change the operation of the Business, Assets or the Assumed Liabilities or incur any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of business;
(vi) make any loans, advances or capital contributions to, or investments in, any Person Debt (other than advances of expenses to Business Employees borrowings under the Company’s existing debt facilities in the Ordinary Course ordinary course of Business);
(viibusiness consistent with past practice) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change guarantee Debt of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on or otherwise encumber any Assets, other than in the Ordinary Course of Business;
(ix) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become dueanother Person, or (D) any other thing under any applicable Law relating to bankruptcy issue or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur any Indebtedness or issue sell any debt securities or warrants or other rights to acquire any debt securities security of Seller the Company or assume, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person for Indebtedness or capital obligations, in the case of any of the foregoingits Subsidiaries;
(xiij) cancel enter into any debts owed to or claims held by Seller in excess of $35,000;
(xiii) abandon, disclaim, dedicate Contract that would have been a Material Contract had it been entered into prior to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP entering into of this Agreement;
(xivk) disclose make any confidential changes with respect to accounting policies or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;
(xv) revalue any of the assets of the Sellerprocedures, except as required by changes in GAAP;
(l) other than in the ordinary course of business consistent with past practice, amend, modify or terminate any Material Contract, or enter intocancel, modify or waive any Debts or claims held by it or waive any rights;
(m) except as set forth on Schedule 3.1(m), make any material Tax election, take any material position on any Tax Return filed on or after the date of this Agreement or adopt any tax accounting method that is inconsistent with positions taken or methods used in preparing or filing similar Tax Returns in prior periods, or permit settle or resolve any material Tax controversy;
(n) other than pursuant to Contracts in effect prior to the date of this Agreement and disclosed on the Schedules, transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $100,000 in the aggregate;
(o) except as set forth on Schedule 3.1(o) or otherwise required by applicable Law, (i) increase the compensation, bonus or pension or welfare benefits of, or make any new equity-based awards to, any director, officer or employee of the Company or any of its Subsidiaries (other than those increases in the ordinary course of business consistent with past practice to employees below the Vice President level), (ii) establish, adopt, amend or terminate any Benefit Plan or amend the terms of any Benefit Plan or outstanding equity-based awards or (iii) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already required by any such Benefit Plan;
(p) settle, or consent to any settlement of, any actions, suits, claims or proceedings against the Company or any of its Subsidiaries or any obligation or liability of the Company or any of its Subsidiaries alleging any injury or damage (other than disputes with customers or suppliers in the ordinary course of business consistent with past practice and not exceeding $50,000 per claimant);
(q) take any action or omit to take any action that will waive, modify, compromise or extinguish any of the assets Company’s or any of the Seller its Subsidiaries’ rights with respect to become bound by any Contract that is agreements, understandings or would constitute a Material Contractarrangements relating to any insurance coverage;
(xvir) take any action or omit to take any action that is reasonably likely to result in any of the conditions to Closing set forth in Article VI not being satisfied (A) change any method of accounting or accounting practice, other than changes the taking of any action required to be taken under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course omission of Businessany action prohibited under applicable Law);
(xviis) makeenter into, revoke terminate, amend or change modify any Tax election by Seller that could adversely impact the amount of Taxes due Contract or payable (and/or transaction with any direct Affiliate, member or indirect owner of equity interests in Buyer) after the Closing Dateother Related Party;
(xviiit) modify, amend or terminate enter into any purchase order (other than pursuant to purchase orders entered into in the expiration ordinary course of its term other business consistent with past practice and in an amount less than as a result of any action taken by Seller$10 million); or (u) agree, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunder;
(xix) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property;
(xx) commence, settle or compromise any Proceeding;
(xxi) cancel, materially reduce or fail to maintain any insurance policy;
(xxii) change or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;
(xxiii) engage in any transaction with any Related Parties; or
(xxiv) authorize or enter into commit to do any agreement, commitment or understanding (whether written or oral) with respect to of the foregoing.
Appears in 1 contract
Sources: Contribution Agreement (McJunkin Red Man Holding Corp)
Interim Operations. (a) From The Company covenants and agrees as to itself and its Subsidiaries that, from and after the date hereof until execution of this Agreement and prior to the earlier Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as otherwise expressly disclosed in Section 6.1(a) of the Closing or termination Company Disclosure Letter), the business of this Agreement, Seller the Company and its Subsidiaries shall (i) operate the Business only be conducted in the Ordinary Course ordinary course of Businessbusiness consistent with past practice and each of the Company and its Subsidiaries shall, including maintaining appropriate service levels, and in subject to compliance with applicable Law including any COVID-19 Measures; and (ii) the specific matters set forth below, use commercially reasonable best efforts to (A) maintain and preserve intact the its business organization intact and maintain the existing relations and goodwill of the Businesswith Governmental Entities, the Assets and the Assumed Liabilitiescustomers, (B) maintain satisfactory relationships with Seller’s clientssuppliers, operatorscontent providers, distributors, customerslicensors, insurance underwriters creditors, lessors, employees and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, associates and keep available the services of, of the Business Employees.
(b) Company and its Subsidiaries’ present employees and agents. Without limiting the generality of of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the Effective Time, except (A) as set forth Parent may approve in writing (such approval not to be unreasonably withheld, conditioned or delayed), (B) as expressly disclosed in Section 5.1(b6.1(a) or (d) of the Company Disclosure Schedule, Letter or (C) as expressly permitted by this Agreement or as approved provided for in writing by ▇▇▇▇▇, from the date hereof until the earlier of the Closing or the termination of this Employee Matters Agreement, Seller the Company shall not take any action which would require disclosure on Section 2.8 of the Disclosure Schedule orand will not permit its Subsidiaries to:
(i) take or omit to take any action that results or may reasonably be expected to result in any of the representations and warranties of Seller or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfied;
(ii) amend or otherwise change the organizational documents of Seller;
(iii) (A) authorize, issue, sell amend its certificate of incorporation or transfer any membership interests bylaws (or other securities of Sellercomparable governing documents), (B) adjust, split, combine combine, subdivide or reclassify or otherwise amend the terms its outstanding shares of any membership interest or other security of Sellercapital stock, (C) declare, authorize, set aside make or pay any dividend or other distribution (whether payable in cash, stock or other propertyproperty (or any combination thereof) in respect of any shares of its capital stock (except for any dividends or distributions paid by Sky Brasil Servicios Ltda. or a direct or indirect wholly owned Subsidiary of the Company to its stockholders or unitholders on a pro rata basis in the ordinary course of business consistent with past practice), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any equity shares of Sellerits capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock;
(iv) (Aii) merge or consolidate with any other Person, acquire except for any business such transactions among wholly owned Subsidiaries of the Company, or assets restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or business;
(iii) knowingly take or omit to take any action if such action or failure to act would be reasonably likely to prevent or impede the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code;
(iv) (A) establish, adopt, amend or terminate any Company Plan or amend the terms of any other Person (whether by mergeroutstanding equity-based awards, stock purchase, asset purchase or other business combination), other than the purchase of supplies in the Ordinary Course of Business or (B) form grant or provide any new Subsidiaryseverance or termination payments or benefits to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, except to comply with applicable Law or as expressly required by the provisions of the Company Plans as in effect on the date hereof or the provisions of this Agreement, (C) increase the compensation, bonus or pension, welfare, severance or other benefits of or pay any bonus to any director, officer or employee of the Company or any of its Subsidiaries, (D) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Plan (including any equity-based awards), except to the extent expressly required by any such Company Plan or provided in this Agreement, (E) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or to comply with applicable Law, or (F) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(v) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) materially change indebtedness for borrowed money incurred in the operation ordinary course of business consistent with past practice not to exceed $25,000,000 in the Businessaggregate on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, Assets or the Assumed Liabilities or any method of purchasetaken as a whole, salethan existing indebtedness for borrowed money, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into indebtedness for borrowed money in replacement of existing indebtedness for borrowed money which has matured or is scheduled to mature within the twelve month period following such incurrence of indebtedness at the then prevailing market rates and on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a new line whole, than the indebtedness being replaced or (C) guarantees incurred in compliance with this Section 6.1 by the Company and its Subsidiaries of business or abandon or discontinue an existing line indebtedness of businessits wholly owned Subsidiaries;
(vi) make or commit to any capital expenditures other than in the ordinary course of business consistent with past practice and in the aggregate in any event not in excess of (A) in 2014, 110% of the aggregate amounts reflected in the Company’s capital expenditure budget set forth in Section 6.1(a)(vi)(A) of the Company Disclosure Letter (the “2014 CapEx Budget”) and (B) in 2015, the sum of (1) the remainder (if a positive number) of (x) 100% of the 2014 CapEx Budget minus (y) the actual amount the Company made or committed to pursuant to the preceding clause (A) plus (2) 110% of the Company’s 2015 capital expenditure budget set forth in Section 6.1(a)(vi)(B) of the Company Disclosure Letter; provided that the Company’s timing of such capital expenditures in 2015 shall be consistent with past practice.
(vii) other than transfers among and between wholly owned Subsidiaries of the Company, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien (other than Permitted Liens) upon or otherwise dispose of any of their respective properties or assets (including capital stock of any of its Subsidiaries) with a fair market value in excess of $50,000,000 individually or $100,000,000 in the aggregate (except with respect to Intellectual Property that is material to the respective businesses of the Company or its Subsidiaries, which shall not be included in this exception) or that are otherwise material other than ordinary course sales of customer premises equipment, or, with respect to Intellectual Property, non-exclusive license grants, in each case, made in the ordinary course of business consistent with past practice;
(viii) issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer on encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares except any Shares issued pursuant to Company Options, Company SARs, Company Restricted Stock Units, Company Performance Stock Units and Company Awards outstanding on the date of this Agreement expressly required by the existing terms or such awards and the Company Stock Plans;
(ix) other than acquisitions of inventory or assets in the ordinary course of business consistent with past practice and making or committing to any capital expenditures in compliance with Section 6.1(a)(vi), spend in excess of $50,000,000 individually or $200,000,000 in the aggregate to acquire any business or to acquire assets or other property, whether by merger, consolidation, purchase of property or assets or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Subsidiaries shall make any acquisition that would, or would reasonably be likely to prevent, delay or impair the Company’s ability to consummate the transactions contemplated by this Agreement;
(x) make any material change with respect to its accounting policies or procedures, except as required by changes in GAAP or by applicable Law;
(xi) except as required by applicable Law, (A) make any Tax election that is material to the Company and its Subsidiaries, taken as a whole, or take any position that is material to the Company and its Subsidiaries, taken as a whole, on any material Tax Return filed on or after the date of this Agreement; that is inconsistent with elections made or positions taken in preparing or filing similar Tax Returns in prior periods, (B) change any method of Tax accounting, which change is material to the Company and its Subsidiaries, taken as a whole, (C) amend any Tax Return with respect to an amount of Taxes that is material to the Company and its Subsidiaries, taken as a whole, or (D) settle or resolve any Tax controversy that is material to the Company and its Subsidiaries, taken as a whole;
(xii) (A) (1) enter into any new line of business other than any line of business that is reasonably ancillary to and a reasonably foreseeable extension of any line of business as of the date of this Agreement, or (2) start to conduct a line of business of the Company or any of its Subsidiaries in any geographic area where it is not conducted as of the date of this Agreement, other than starting to conduct a line of business of the Company or any of its Subsidiaries in geographic areas that are reasonable extensions to geographic areas where such business line is conducted as of the date of this Agreement (provided that in the case of each of clauses (1) and (2), such entry or expansion would not require the receipt or transfer of any License that would constitute a Communications License if issued or granted prior to the date hereof and would not reasonably be expected to prevent, delay (other than in a de minimis respect) or impair the ability of the Company, Parent and Merger Sub to complete the Merger on a timely basis) or (B) except as currently conducted, engage in the conduct of any business in any state which would require the receipt or transfer of a Communications License or License that would constitute a Communications License if issued or granted prior to the date hereof or in any foreign country that would require the receipt of a material License;
(xiii) file or apply for any License outside of the ordinary course of business consistent with past practice;
(xiv) other than in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000,000, make any loans, advances or capital contributions to, or investments in, any Person (other than loans, advances of expenses or capital contributions to Business Employees in the Ordinary Course of Business);
(vii) (A) institute Company or announce any increase in the compensation, bonuses direct or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on or otherwise encumber any Assets, other than in the Ordinary Course of Business;
(ix) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing indirect wholly owned Subsidiary of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur any Indebtedness or issue any debt securities or warrants or other rights to acquire debt securities of Seller or assume, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person for Indebtedness or capital obligations, in the case of any of the foregoing;
(xii) cancel any debts owed to or claims held by Seller in excess of $35,000;
(xiii) abandon, disclaim, dedicate to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreement;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof Company or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the SellerSky Brasil Servicios Ltda.);
(xv) revalue enter into any Contract pursuant to which the Company or any of its Subsidiaries agrees to provide any wireless, wireline or Internet services to any Person (other than Parent or its Subsidiaries) as an agent or reseller if such Contract is not terminable by the assets Company or one of the Seller, except as required by GAAP, its Subsidiaries on 60 days’ or enter into, or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contractless notice without penalty;
(xvi) (A) change any method of accounting or accounting practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course ordinary course of Businessbusiness, (a) amend or modify in any material respect or terminate (excluding terminations upon expiration of the term thereof in accordance with the terms thereof) any Material Contract or waive, release or assign any material rights, claims or benefits under any Material Contract and (b) enter into any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement unless it is on terms substantially consistent with, or on terms more favorable to the Company and/or its Subsidiaries (and to Parent and its Subsidiaries following the Closing) than, either a Contract it is replacing or a form of such Material Contract made available to Parent prior to the date hereof;
(xvii) makesettle any action, revoke suit, case, litigation, claim, hearing, arbitration, investigation or change any Tax election by Seller that could adversely impact the amount of Taxes due other proceedings before or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Datethreatened to be brought before a Governmental Entity;
(xviii) modifyassign, amend transfer, forfeit, cancel, fail to renew, or terminate (other than pursuant fail to extend or defend any Communications License that is material to the expiration of Company and its term other than as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunderSubsidiaries;
(xix) fail to pay enter into any collective bargaining agreement, unless required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Propertyby applicable Law;
(xx) commence, settle enter into any Contract that obligates or compromise purports to obligate any Proceeding;existing or future non-controlled Affiliate of the Company (including any parent entity) to grant licenses to any Intellectual Property; or
(xxi) cancelagree, materially reduce resolve or fail commit to maintain do any insurance policy;of the foregoing.
(xxiib) change Parent covenants and agrees, from and after the execution of this Agreement and prior to the Effective Time (unless the Company shall otherwise approve in writing, which approval will not be unreasonably withheld, conditioned or modify delayed and except as otherwise expressly contemplated by this Agreement or expressly disclosed in Section 6.1(b) of the SellerParent Disclosure Letter):
(i) Parent shall not (A) amend Parent’s creditcertificate of incorporation or bylaws in any manner that would prohibit or hinder, collection, impede or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) delay in any material respect the Merger or fail the consummation of the other transactions contemplated hereby or have a material and adverse impact on the value of the Parent Common Stock; provided that any amendment to its certificate of incorporation to increase the authorized number of shares of any class or series of the capital stock of Parent shall in no way be restricted by the foregoing, or (B) declare, set aside or pay any dividend or delay payment distribution payable in cash, stock or property in respect of payables any capital stock, other than regular quarterly cash dividends on the Parent Common Stock as described on Section 6.1(b)(i) of the Parent Disclosure Letter and other than dividends or other Liabilities in any material respectdistributions with a record date after the Effective Time;
(xxiiiii) engage in Parent shall not, and shall not permit any transaction with of its Subsidiaries to, acquire another business that, at the time such action is taken, to the Knowledge of Parent, would be likely to prevent the Closing;
(iii) Parent shall not knowingly take or omit to take any Related Partiesaction if such action or failure to act would be reasonably likely to prevent or impede the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code; or
(xxiviv) authorize Parent shall not agree, resolve, or enter into commit to do any agreement, commitment or understanding (whether written or oral) with respect to of the foregoing.
(c) (i) Officers of the Company shall, prior to the Effective Time, execute and deliver to each of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP and Weil, Gotshal & ▇▇▇▇▇▇ LLP a certificate substantially in the form of Section 6.1(c)(i) of the Company Disclosure Letter (with such changes as are necessary, in the opinion of such counsel, to reflect any change in applicable Law, regulation or official interpretation thereof occurring between the date hereof and the Closing Date).
Appears in 1 contract
Sources: Merger Agreement (At&t Inc.)
Interim Operations. (a) From Between the date hereof until Signing Date and the Closing Date or the earlier of the Closing or termination of this Agreement in accordance with Article X, except (x) for the Restructuring or the Pre-Closing Distribution each in accordance herewith, (y) as set forth on Schedule 7.1 or (z) as otherwise expressly required by this Agreement, unless Buyer has previously expressly consented in writing or to the extent required by applicable Law, each Seller shall and Parent Company will, and will cause each other member of the Company Group to, (i) operate the Business only conduct its operations in the Ordinary Course of Business, including maintaining appropriate service levels, Business and in compliance accordance with applicable Law including any COVID-19 Measures; Law, and (ii) use commercially reasonable efforts to (A) preserve and maintain and preserve intact the business current business, assets, properties, organization and goodwill of the Business, the Assets and the Assumed LiabilitiesCompany Group, (B) maintain satisfactory books, accounts and records of the Company Group in accordance with past practice and (C) preserve and maintain the present relationships with Seller’s clients, operators, distributors, customers, insurance underwriters suppliers, Governmental Authorities, lenders and other third parties others having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services of, the Business EmployeesCompany Group.
(b) Without limiting the generality of the foregoing, between the Signing Date and the Closing Date or the earlier termination of this Agreement in accordance with Article X, except (x) in connection with the Restructuring and the Pre-Closing Distribution, (y) as set forth in Section 5.1(bon Schedule 7.1 or (z) of the Disclosure Schedule, as otherwise expressly permitted required by this Agreement or as approved in writing by ▇▇▇▇▇, from the date hereof until the earlier of the Closing or the termination of this Agreement, Seller unless Buyer has previously expressly consented in writing or to the extent required by applicable Law, Sellers and the Parent Companies shall not take any action which would require disclosure on Section 2.8 not, and shall cause each other member of the Disclosure Schedule orCompany Group not to, do any of the following:
(i) take or omit (A) make any amendment, modification, change to take the Organizational Documents of any action that results or may reasonably be expected to result in any member of the representations and warranties of Seller Company Group (or the Beneficial Owners set forth herein being or becoming untrue in waive compliance with any material respect provision thereof) or in (B) form any of the conditions set forth herein not being satisfiednew Subsidiary;
(ii) amend or otherwise change the organizational documents of Seller;
(iii) (A) authorize, issue, pledge, suffer any security interests on, assign, transfer, or sell or transfer any membership interests Equity Interests of the Company Group or other securities rights to purchase or otherwise acquire for any such Equity Interests of Seller, the Company Group or (B) adjust, split, combine or combine, redeem, recapitalize, reclassify or otherwise amend the terms subdivide any Equity Interests of any membership interest member of the Company Group or other security make any commitments to do any of Seller, (C) declare, authorize, set aside make or pay any dividend or other distribution (whether in cash, stock or other property) or (D) enter into any agreement the foregoing with respect to any Equity Interests;
(iii) subject to any Liens (other than Permitted Liens), sell, assign, transfer, license (other than granting non-exclusive licenses to customers in the voting Ordinary Course of Business), sublicense, abandon, allow to lapse or expire, or otherwise dispose of, or fail to enforce, maintain, or protect any equity of Sellermaterial Company Group IP or amended or modified in any material respect any existing Contract or rights with respect to any material Company Group IP;
(iv) (A) merge or consolidate with any other Person, (B) acquire any Equity Interests, business, line of business, other business organization or assets division thereof, or all or substantially all of the assets, of another Person, in a single transaction or a series of related transactions; (C) make any investment or capital contribution in or loan to any other Person or business; (whether by D) enter into any joint venture, partnership or similar venture with any Person; (E) restructure, reorganize or adopt a plan or agreement of liquidation, dissolution, merger, stock purchase, asset purchase consolidation or other business combination), other than the purchase of supplies in the Ordinary Course of Business reorganization or (BF) form dispose of, lease, transfer, surrender, abandon, waive, lapse or release any new Subsidiaryasset, right, claim, debt or property, tangible or intangible, of the Company Group which is material to the business as a whole;
(v) (A) materially change amend or modify in any material and adverse respect (including of payment terms), cancel, terminate or initiate the operation termination (other than termination due to expirations of the Businesssuch Contracts in accordance with their terms) of, Assets or the Assumed Liabilities waive or assign any method of purchasematerial right, saleclaim or benefit under, leaseany Material Contract, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business Contract which, had it been entered into prior to the Signing Date, would have been a Material Contract or abandon or discontinue an existing line of business;
(vi) make any loansReal Property Lease, advances or capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of Business);
(vii) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on or otherwise encumber any Assetseach case, other than in the Ordinary Course of Business;
(ixvi) acquire (A) amend or modify in any real property material and adverse respect (including of payment terms), cancel, terminate or undertake initiate the termination of, or commit waive or assign any material right, claim or benefit under, any Specified Contract or Real Property Lease. or (B) enter into a Contract which, had it been entered into prior to undertake capital expenditures for the Signing Date, would have been a Specified Contract or Real Property Lease;
(vii) (A) accelerate the collection of accounts receivable, (B) delay the payment of accounts payable or accrued expenses, or (C) delay the purchase of equipment supplies or tangible assets exceeding $35,000 delay material capital expenditures, repairs or maintenance, in each case of the foregoing clauses (A)-(C), outside of the Ordinary Course of Business;
(viii) grant or announce any new award of, increase the amount of, or accelerate of the timing of funding, payment or vesting of, any cash, equity or equity-based incentive, severance, change in control, retention, transaction or other bonus, salary, or other compensation or benefit of any current or former employee, officer, director, or other individual service provider of any member of the Company Group other than (x) with respect to discretionary bonuses in the aggregateOrdinary Course of Business or (y) as required by Law, any existing agreement in effect as of the Signing Date and set forth on Schedule 4.10(a), or the existing terms of any Employee Plan in effect as of the Signing Date and set forth on Schedule 4.10(a);
(ix) enter into, establish, adopt, terminate, amend or modify any Employee Plan or any other benefit or compensation plan, policy, program, contract, agreement or arrangement that would be an Employee Plan if in effect as of the Signing Date, other than with respect to discretionary bonuses in the Ordinary Course of Business or as required by Law;
(x) agree to, request or adopt (A) hire, promote or engage, or otherwise enter into any moratorium employment or suspension of payment of consulting agreement or arrangement with any Indebtednessindividual whose annualized compensation opportunities exceeds or would reasonably be expected to exceed $200,000, or (B) terminate, other than for cause, the appointment employment or service of a receiverany current or former employee, administratorofficer, liquidator, assignee, trustee director or other similar official with respect service provider whose annualized compensation opportunities exceeds or would reasonably be expected to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C)exceed $200,000;
(xi) incur (A) modify, extend, negotiate, terminate or enter into any Indebtedness Labor Agreement or issue (B) recognize or certify any debt securities labor union, labor organization, works council or warrants or other rights to acquire debt securities group of Seller or assume, guarantee or endorse, employees as an accommodation or otherwise, the obligations of bargaining representative for any Person for Indebtedness or capital obligations, in the case of any employees of the foregoingCompany Group;
(xii) cancel implement or announce any debts owed to employee layoffs, furloughs, reductions in force, plant closings, reductions in compensation or claims held by Seller other similar actions, in excess of $35,000each case, that would trigger notice obligations under the WARN Act;
(xiii) abandonwaive or release any noncompetition, disclaimnon-solicitation, dedicate to nondisclosure or other restrictive covenant obligation of any current or former employee or independent contractor of the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP AgreementCompany Group;
(xiv) disclose (A) make (outside the Ordinary Course of Business), change or rescind any confidential or proprietary information or confidential Business Intellectual Property U.S. federal income Tax entity classification election with respect to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;
(xv) revalue any member of the assets Company Group or any other material election relating to Taxes; (B) adopt, change or revoke any material method of the SellerTax accounting, except as required by GAAP; (C) settle or compromise any U.S. federal, state or local or non-U.S. Tax Liability, claim, dispute or assessment with respect to any material amount of Taxes; (D) amend any income or other material Tax Return; (E) enter intointo any closing agreement or similar agreement with any Taxing Authority; (F) waive or consent to an extension of a statute of limitations period applicable to any Tax claim, assessment or permit deficiency; (G) fail to pay any material Tax when due and payable or otherwise incur any material penalties or interest in respect of any Tax; or (H) surrender any right to claim a material Tax refund or surrender any other material Tax asset;
(xv) make any material change to the accounting methods, principles or practices of any member of the assets of the Seller to become bound Company Group, except as may be required by any Contract that is GAAP or would constitute a Material Contractchanges in Law;
(xvi) (A) change issue, create, incur, assume, guarantee, endorse, refinance or otherwise become liable or responsible with respect to (whether directly, contingently or otherwise) any method of accounting indebtedness for borrowed money or accounting practiceother Company Group Debt, other than changes required under applicable Law (i) to the extent paid in full or GAAP otherwise discharged prior to the Closing, or (Bii) fail reflected in the Estimated Closing Statement and determination of Estimated Closing Date Cash Payment therein;
(xvii) make any investments in or loans to maintain the Seller’s books, accounts and records in or enter into or modify any Contract with any Related Persons outside of the Ordinary Course of Business;
(xvii) make, revoke or change any Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date;
(xviii) modifysubject to any Lien or otherwise encumber or permit, amend allow or terminate suffer to be encumbered, (A) any of the material properties or material assets owned, used or occupied by the Company Group, other than pursuant to a Permitted Lien, or (B) the expiration Equity Interests of its term any member of the Company Group, other than as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunderSecurities Liens;
(xix) fail settle or compromise any pending or threatened Action against any member of the Company Group (or for which any member of the Company Group would be financially responsible), whether or not commenced prior to pay the Signing Date, other than settlements of any required maintenance pending or other similar fees threatened Action in the Ordinary Course of Business for payment of amounts less than $50,000 individually; provided, that no settlement of any pending or otherwise fail threatened Action may involve any injunctive or equitable relief, or impose material restrictions on any member of the Company Group, or admit wrongdoing, or be with respect to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Propertya criminal matter;
(xx) commencemake or authorize capital expenditures for property, settle or compromise any Proceedingplant and equipment, except those otherwise in an aggregate amount for all such capital expenditures not to exceed $100,000 in the aggregate;
(xxi) cancelenter into any agreement or arrangement that would purport to bind or impose a restrictive covenant on (other than customary confidentiality obligations), or otherwise materially reduce limit the operations of, Buyer or fail to maintain any insurance policyof its Affiliates following the consummation of the Closing (including the Company Group);
(xxii) change cause or modify the Seller’s creditintentionally allow any Permit to be cancelled, collectionrevoked, terminated, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;suspended; or
(xxiii) engage agree to take any of the actions described in clauses (i) through (xx) above. Nothing contained in this Section 7.1 or elsewhere in this Agreement shall preclude any Parent Company, in its sole discretion, from (i) using available Cash to pay indebtedness, transaction with expenses, cash dividends or distributions, or (ii) assuming, settling, cancelling, or otherwise terminating any Related Parties; or
(xxiv) authorize or enter into all of the Company Group’s obligations, receivables, payables, loans or other intercompany accounts between any agreementSeller and/or any member of the Company Group. In addition, commitment nothing contained in this Agreement shall give Buyer, directly or understanding (whether written indirectly, the right to control or oral) with respect direct the business or operations of any member of the Company Group prior to the foregoingClosing. Prior to the Closing, each member of the Company Group shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its business and operations.
Appears in 1 contract
Sources: Purchase Agreement (Gogo Inc.)
Interim Operations. (a) From The Company covenants and agrees that, after the date hereof until and prior to the earlier of the Closing or termination Effective Time and the date, if any, of which this AgreementAgreement is earlier terminated pursuant to Article VI, Seller its business and the business of its Subsidiaries shall (i) operate the Business only be conducted in the Ordinary Course ordinary course of Businessbusiness consistent with past practice. To the extent consistent with the foregoing sentence, including maintaining appropriate service levels, the Company and in compliance with applicable Law including any COVID-19 Measures; and (ii) its Subsidiaries shall use their respective commercially reasonable efforts to (A) preserve their business organizations intact and maintain and preserve intact the business organization existing relations and goodwill of the Businesswith Governmental Entities, the Assets and the Assumed Liabilitiescustomers, (B) maintain satisfactory relationships with Seller’s clients, operatorssuppliers, distributors, customerscreditors, insurance underwriters lessors, employees and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, associates and keep available the services ofof the present employees and agents of the Company and its Subsidiaries. Nothing in the foregoing sentences shall prohibit or restrict the Company and its Subsidiaries from taking any of the following actions: (i) actions approved by Parent in writing (which approval shall not be unreasonably delayed, and Parent agrees to consider in good faith any actions to be taken by the Business Employees.
Company for which such approval is being sought from Parent by the Company), (bii) any action expressly required or expressly not prohibited by this Agreement; and (iii) any action required by Law (including any requirement of the SEC). Without limiting the generality of the foregoing, except as set forth foregoing and in Section 5.1(b) of the Disclosure Schedule, as expressly permitted by this Agreement or as approved in writing by ▇▇▇▇▇furtherance thereof, from the date hereof until the earlier of the Closing or Effective Time and the termination of date, if any, on which this AgreementAgreement is earlier terminated pursuant to Article VI, Seller shall not take any action which would require disclosure on Section 2.8 of the Disclosure Schedule or:
(i) take or omit to take any action that results or may reasonably be expected to result in any of the representations and warranties of Seller or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfied;
(ii) amend or otherwise change the organizational documents of Seller;
(iii) except (A) authorize, issue, sell as otherwise expressly required or transfer any membership interests or other securities of Sellerexpressly not prohibited by this Agreement, (B) adjust, split, combine or reclassify or otherwise amend as Parent may approve in writing (such approval not to be unreasonably delayed and Parent agrees to consider in good faith any actions to be taken by the terms of any membership interest or other security of SellerCompany for which such approval is being sought from Parent by the Company), (C) as set forth in Section 3.1 of the Company Disclosure Letter or (D) as required by any applicable Laws (including any requirement of the SEC), the Company will not and will not permit its Subsidiaries to:
(a) adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instruments;
(b) acquire or agree to acquire (i) by merging or consolidating with, or by purchasing a substantial portion of the stock, or other ownership interests in, or substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, association, joint venture, limited liability company or other entity or division thereof or (ii) any assets that would be material, individually or in the aggregate, to the Company and its Subsidiaries, taken as a whole, except, in each case, (x) purchases of supplies, equipment, services and inventory in the ordinary course of business consistent with past practice and (y) any Permitted Acquisition;
(c) restructure, recapitalize, reorganize or completely or partially liquidate the Company or any of its Subsidiaries or adopt a plan of complete or partial liquidation with respect to the Company or any of its Subsidiaries or adopt resolutions providing for or authorizing any of the foregoing;
(d) except as set forth in Section 4.1(d) of the Company Disclosure Letter, other than shares of Class A Common Stock issuable under the Company Stock Plans issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or Encumbrance of, any shares of capital stock of the Company or any its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(e) make any loans, advances (except for advances to employees in respect of travel and business expenses) or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly owned Subsidiary of the Company) other than in the ordinary course of business consistent with past practice;
(f) (i) declare, authorizeset aside, set aside make or pay any dividend or other distribution (whether distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for dividends or other propertydistribution paid (x) by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary of the Company and (y) on the Shares declared by the Company Board of Directors in accordance with the Company’s stated dividend policy consistent with past practice, including, but not limited to, (A) those certain dividends declared by the Company Board of Directors on May 10, 2007 in respect of the Shares and payable June 1, 2007 in an aggregate amount not to exceed $16,029,100 and (B) those certain dividends payable on September 1, 2007 in respect of outstanding shares of Class A Common Stock, and (C) those certain dividends declared on or after November 1, 2007 and payable only in the event the transactions contemplated by this Agreement are not consummated on or prior to November 30, 2007 or (Dii) enter into any agreement with respect to the voting of any equity of Sellerits capital stock;
(ivg) (A) merge other than transactions involving direct or consolidate with any other Personindirect wholly owned Subsidiaries of the Company, acquire any business reclassify, split, combine, subdivide or assets of any other Person (whether by mergerredeem, stock purchase, asset purchase or other business combination)otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock other than pursuant to the purchase of supplies in the Ordinary Course of Business or (B) form any new SubsidiaryCompany Stock Plans;
(v) (A) materially change the operation of the Business, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of business;
(vi) make any loans, advances or capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of Business);
(vii) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on or otherwise encumber any Assets, other than in the Ordinary Course of Business;
(ix) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C);
(xih) incur any Indebtedness indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt securities security of Seller the Company or assumeany of its Subsidiaries, guarantee except for indebtedness for borrowed money (i) incurred pursuant to agreements in effect prior to the date hereof, provided that the Company shall not incur any additional indebtedness under the Credit Agreement without the prior consent of Parent, (ii) incurred in the ordinary course of business consistent with past practices not to exceed $1,000,000 in the aggregate or endorse, as an accommodation (iii) guarantees incurred in compliance with this Section 4.1 by the Company or otherwise, the obligations any of its direct or indirect wholly owned Subsidiaries of indebtedness of any Person for Indebtedness direct or capital obligations, in the case of any indirect wholly owned Subsidiary of the foregoingCompany;
(xiii) cancel fail to pay when due (after taking into account any debts owed applicable grace periods and notice requirements) all interest due and payable on the Company’s indebtedness incurred prior to the date hereof;
(j) except (i) as set forth in the capital budgets previously made available to Parent or claims held by Seller its Affiliates (and set forth in the Company Disclosure Letter) and consistent therewith, or (ii) in connection with one or more Permitted Acquisitions, make or authorize any capital expenditures in excess of $35,0002,000,000 in the aggregate;
(xiiik) abandon, disclaim, dedicate to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreement;
(xivexcept as set forth in Section 4.1(k) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;
(xv) revalue any of the assets of the SellerCompany Disclosure Letter, make any changes with respect to accounting policies or procedures, except as required by GAAPLaw or changes in applicable generally accepted accounting principles;
(l) except as set forth in Section 4.1(l) of the Company Disclosure Letter, settle or compromise any pending or threatened material suit, action, claim or litigation or other proceedings before a Governmental Entity other than the settlement or compromise of any such suit, action, claim or litigation or other proceedings (A) in the ordinary course of business consistent with past practice and (B) reflected or reserved against in the financial statements of the Company for the period ended December 31, 2006, but only to the extent that the amount of such settlement or compromise is not materially in excess of such reflected or reserved amount;
(m) other than in the ordinary course of business consistent with past practice, make or change any material Tax election, or enter intosettle or finally resolve any Tax contest with respect to a material amount of Tax;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or permit allow to lapse or expire or otherwise dispose of any material assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except in the ordinary course of business, except for obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $2,500,000 in the Seller aggregate, other than pursuant to become bound Contracts in effect prior to the date hereof;
(o) other than in the ordinary course of business consistent with past practice or as required by applicable Law, materially amend, modify, supplement, waive or terminate (other than termination in accordance with their terms) or enter into any Contract that is or would constitute a Material Contract;
(xvip) except (w) as required pursuant to existing written, binding agreements in effect prior to the date hereof, (x) as required by any Employee Benefit Plan in each case listed on Section 3.1(h) of the Company Disclosure Letter, (y) as set forth in Section 4.1(p) of the Company Disclosure Letter, or (z) as otherwise required by applicable Law, (i) grant or provide any new severance or new termination payments or new material benefits to any existing director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of or pay any bonus to any officer, employee or director of the Company, other than such increases which in the aggregate would not result in payments in excess of $1,800,000 in any given fiscal year of the Company including (A) change increases made to hourly employees of the Company or any method of accounting or accounting its Subsidiaries in the ordinary course of business consistent with past practice, other than changes required under applicable Law or GAAP or (B) fail increases in payments of sales commissions by the Company or any of its Subsidiaries resulting from adjustments to maintain the SellerCompany’s bookssales commission plans as in effect on the date hereof; provided that, accounts and records for the avoidance of doubt, payments of sales commissions by the Company or any of its Subsidiaries made in the Ordinary Course ordinary course of Business;
business consistent with past practice and in accordance with the Company’s sales commission plans as in effect on the date hereof shall be permitted under this Agreemrnt, (xviiC) makemaking any new equity awards to any director, revoke officer or change employee of the Company or any Tax election by Seller of its Subsidiaries or (D) increases in quarterly bonuses to regional vice presidents made in the ordinary course of business consistent with past practice; provided that could adversely impact any quarterly bonus payments to regional vice presidents made in the amount ordinary course of Taxes due business consistent with past practice not exceeding $100,000 in the aggregate shall be permitted under this Agreement, (iii) grant or payable pay any transaction-related bonuses or make any other similar payments, whether or not in cash, in connection with the transactions contemplated hereby, (and/or any direct or indirect owner of equity interests in Buyeriv) after the Closing Date;
(xviii) modifyestablish, adopt, amend or terminate any Benefit Plan or amend the terms of any outstanding equity-based awards, (other than pursuant v) subject to the expiration terms of this Agreement, take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (vi) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vii) forgive any loans to directors, officers or, outside the ordinary course of business consistent with past practice, employees of the Company or any of its term other than as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunder;
(xix) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property;
(xx) commence, settle or compromise any Proceeding;
(xxi) cancel, materially reduce or fail to maintain any insurance policy;
(xxii) change or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;
(xxiii) engage in any transaction with any Related PartiesSubsidiaries; or
(xxivq) agree, authorize or enter into commit to do any agreement, commitment or understanding (whether written or oral) with respect to of the foregoing.
Appears in 1 contract
Interim Operations. (a) From The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof until and prior to the earlier of Effective Time (unless SBC shall otherwise approve in writing, which approval shall not be unreasonably withheld or delayed, and except as otherwise expressly contemplated by this Agreement or the Closing or termination of this Stock Option Agreement, Seller shall in the Company Disclosure Letter or as required by applicable Law):
(i) operate the Business only business of it and its Subsidiaries shall be conducted in the Ordinary Course of Businessordinary and usual course and, including maintaining appropriate service levelsto the extent consistent therewith, it and in compliance its Subsidiaries shall use all reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with applicable Law including any COVID-19 Measures; customers, suppliers, regulators, distributors, creditors, lessors, employees and business associates;
(ii) use commercially reasonable efforts to it shall not (A) maintain and preserve intact amend its certificate of incorporation or by-laws or amend, modify or terminate the business organization and goodwill Rights Agreement; (B) split, combine, subdivide or reclassify its outstanding shares of capital stock; (C) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, other than per share regular quarterly cash dividends not in excess of $0.44 per Company Share; or (D) repurchase, redeem or otherwise acquire, or permit any of its Subsidiaries (other than the Company's Employee Stock Ownership Plan) to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(iii) neither it nor any of its Subsidiaries shall knowingly take any action that would prevent the Merger from qualifying for "pooling of interests" accounting treatment or as a tax-free "reorganization" within the meaning of Section 368(a) of the BusinessCode or that would cause any of its representations and warranties herein to become untrue in any material respect;
(iv) neither it nor any of its Subsidiaries shall terminate, establish, adopt, enter into, make any new grants or awards under, amend or otherwise modify, any Compensation and Benefit Plans or increase the Assets salary, wage, bonus or other compensation of any directors, officers or employees except (A) for grants or awards to directors, officers and the Assumed Liabilitiesemployees of it or its Subsidiaries under existing Compensation and Benefit Plans in such amounts and on such terms as are consistent with past practice, (B) maintain satisfactory relationships in the normal and usual course of business (which shall include normal periodic performance reviews and related compensation and benefit increases and the provision of individual Compensation and Benefit Plans consistent with Seller’s clients, operators, distributors, customers, insurance underwriters past practice for promoted or newly hired officers and other third parties having business dealings employees and the adoption of Compensation and Benefit Plans for employees of new Subsidiaries in amounts and on terms consistent with Seller, past practice) or (C) pay for actions necessary to satisfy existing contractual obligations under Compensation and Benefit Plans existing as of the date hereof;
(v) neither it nor any of its debts Subsidiaries shall issue any preferred stock or incur any indebtedness for borrowed money (other than indebtedness incurred solely for the purpose of funding the Escrow Account or the replacement or refinancing of existing short-term indebtedness) or guarantee any such indebtedness if the Company should reasonably anticipate that as a result of such incurrence any of the Company's or any of its Subsidiaries' outstanding senior indebtedness would be rated lower than A by Standard & Poor's;
(vi) neither it nor any of its Subsidiaries shall make any capital expenditures in any calendar year in an aggregate amount in excess of the aggregate amount reflected in the Company's capital expenditure budget for such year, a copy of which has been provided to SBC, plus $100 million;
(vii) except as contemplated by Section 6.1(a)(iv), neither the Company nor any of its Subsidiaries shall issue, deliver, sell, or encumber shares of any class of its common stock or any securities convertible into, or any rights, warrants or options to acquire, any such shares except the option granted under the Stock Option Agreement, options outstanding on the date hereof under the Stock Plans, awards of options and Taxes when due restricted stock granted hereafter under the Stock Plans in the ordinary course of business in accordance with this Agreement and shares issuable pursuant to such options and awards;
(subject viii) neither it nor any of its Subsidiaries shall spend in excess of $50 million in any calendar year to good faith disputes regarding acquire any business, whether by merger, consolidation, purchase of property or assets or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, acquisition). For purposes of this clause (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services ofviii), the Business Employeesamount spent with respect to any acquisition shall be deemed to include the aggregate amount of capital expenditures that the Company is obligated to make at any time or plans to make as result of such acquisition within two years after the date of acquisition;
(ix) neither it nor its Subsidiaries shall enter any business other than the telecommunications business and those businesses traditionally associated with the telecommunications business or enter into or extend any telecommunications business outside the geographic areas served by it and its Subsidiaries as of the date of this Agreement; and
(x) neither it nor any of its Subsidiaries shall agree prior to the Effective Time to do any of the foregoing after the Effective Time.
(b) Without limiting SBC covenants and agrees as to itself and its Subsidiaries that, after the generality of date hereof and prior to the foregoingEffective Time (unless the Company shall otherwise approve in writing, which approval shall not be unreasonably withheld or delayed, and except as set forth in Section 5.1(b) of the Disclosure Schedule, as otherwise expressly permitted contemplated by this Agreement or in the SBC Disclosure Letter or as approved in writing required by ▇▇▇▇▇, from the date hereof until the earlier of the Closing or the termination of this Agreement, Seller shall not take any action which would require disclosure on Section 2.8 of the Disclosure Schedule or:applicable Law):
(i) take it shall not (A) amend its certificate of incorporation or omit to take any action that results or may reasonably be expected to result by-laws in any of the representations and warranties of Seller manner that would prohibit or the Beneficial Owners set forth herein being hinder, impede or becoming untrue delay in any material respect the Merger or in any the consummation of the conditions set forth herein not being satisfied;
(ii) amend or otherwise change the organizational documents of Seller;
(iii) (A) authorize, issue, sell or transfer any membership interests or other securities of Seller, transactions contemplated hereby; (B) adjust, split, combine or reclassify or otherwise amend the terms of any membership interest or other security of Seller, (C) declare, authorize, set aside make or pay any dividend or other distribution payable in cash or property (whether other than SBC Common Stock) in cash, stock or other property) or (D) enter into any agreement with respect to the voting of any equity of Seller;
(iv) (A) merge or consolidate with any other Person, acquire any business or assets of any other Person (whether by merger, stock purchase, asset purchase or other business combination)capital stock, other than the purchase of supplies in the Ordinary Course of Business per share regular quarterly cash dividends; or (B) form any new Subsidiary;
(v) (A) materially change the operation of the Business, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of business;
(vi) make any loans, advances or capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of Business);
(vii) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cashrepurchase, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on redeem or otherwise encumber any Assets, other than in the Ordinary Course of Business;
(ix) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur any Indebtedness or issue any debt securities or warrants or other rights to acquire debt securities of Seller or assume, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person for Indebtedness or capital obligations, in the case of any of the foregoing;
(xii) cancel any debts owed to or claims held by Seller in excess of $35,000;
(xiii) abandon, disclaim, dedicate to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreement;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;
(xv) revalue any of the assets of the Seller, except as required by GAAP, or enter intoacquire, or permit any of its Subsidiaries to purchase or otherwise acquire, except in open market transactions or in connection with the assets SBC Stock Plans, any shares of the Seller to become bound by its capital stock or any Contract that is securities convertible into or would constitute a Material Contractexchangeable for any shares of its capital stock;
(xviii) (A) change neither it nor any method of accounting or accounting practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Business;
(xvii) make, revoke or change any Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date;
(xviii) modify, amend or terminate (other than pursuant to the expiration of its term other than Subsidiaries shall knowingly take any action that would prevent the Merger from qualifying as a result tax-free "reorganization" within the meaning of Section 368(a) of the Code or that would cause any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunder;
(xix) fail its representations and warranties herein to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property;
(xx) commence, settle or compromise any Proceeding;
(xxi) cancel, materially reduce or fail to maintain any insurance policy;
(xxii) change or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities become untrue in any material respect;, provided, however, that nothing contained herein shall limit the ability of SBC to exercise its rights under the Stock Option Agreement; and
(xxiiiiii) engage in neither it nor any transaction with any Related Parties; or
(xxiv) of its Subsidiaries will authorize or enter into an agreement to do any agreement, commitment or understanding (whether written or oral) with respect to of the foregoing.
(c) SBC and the Company agree that any written approval obtained under this Section 6.1 may be relied upon by the other party if signed by the Chief Executive Officer, Chief Financial Officer, chief legal officer or another executive officer of the other party.
Appears in 1 contract
Sources: Merger Agreement (Southern New England Telephone Co)
Interim Operations. (a) From Except as expressly required by this Agreement, the Thermalloy Agreement or with the prior consent of Purchaser, from the date hereof until the earlier of the Closing or termination of this Agreement, Seller shall (i) operate the Business only in the Ordinary Course of Business, including maintaining appropriate service levels, and in compliance with applicable Law including any COVID-19 Measures; and (ii) use commercially reasonable efforts to (A) maintain and preserve intact the business organization and goodwill of the BusinessEffective Time, the Assets Company and the Assumed Liabilities, (B) maintain satisfactory relationships with Seller’s clients, operators, distributors, customers, insurance underwriters and other third parties having Subsidiaries shall conduct their business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain respects in effect all Permits the ordinary course consistent with past practice and (E) maintain good relations with, shall use their reasonable best efforts to preserve substantially intact their business organizations and relationships with third parties that are material to the Company and the Subsidiaries taken as a whole and to keep available the services of, the Business Employees.
(b) of their present officers and employees. Without limiting the generality of the foregoing, except as set forth in Section 5.1(b) of the Disclosure Schedule, as expressly permitted by this Agreement or as approved in writing by ▇▇▇▇▇, from the date hereof until the earlier Effective Time the Company will not, and will cause its Subsidiaries not to:
(a) adopt or propose any change in its Certificate of Incorporation or Bylaws;
(b) except pursuant to existing agreements or arrangements (which arrangements shall be deemed to include the Closing or Thermalloy Agreement on the termination of this Agreementterms that have heretofore been disclosed to Purchaser, Seller shall not take any action which would require disclosure on Section 2.8 of including the Disclosure Schedule or:financing thereof):
(i) take acquire (by merger, consolidation or omit to take any action that results acquisition of stock or may reasonably be expected to result in any of the representations and warranties of Seller or the Beneficial Owners set forth herein being or becoming untrue in assets) any material respect corporation, partnership or in any other business organization or division thereof, or sell, lease or otherwise dispose of the conditions set forth herein not being satisfieda material Subsidiary or a material amount of assets or securities;
(ii) amend make any investment other than in readily marketable securities in an amount in excess of $50,000 in the aggregate whether by purchase of stock or otherwise change securities, contributions to capital or any property transfer, or purchase for an amount in excess of $50,000 in the organizational documents aggregate, any property or assets of Sellerany other individual or entity other than purchases of raw materials and finished goods components in the ordinary course of business consistent with past practice;
(iii) (A) authorizewaive, issuerelease, sell grant, or transfer any membership interests rights of value material to the Company and the Subsidiaries taken as a whole;
(iv) modify or change in any material respect any existing license, lease, contract, or other securities document material to the Company and its Subsidiaries, taken as a whole;
(v) except to refund or refinance commercial paper and for borrowings and repayments under its revolving credit facilities for working capital purposes, incur or assume an amount of Sellerlong-term or short-term debt in excess of $250,000 in the aggregate;
(vi) assume, guarantee, endorse (Bother than endorsements of negotiable instruments in the ordinary course of business) adjustor otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person (other than any Subsidiary) which are in excess of $25,000 in the aggregate;
(vii) make any loans or advances to any other Person (other than any Subsidiary) which are in excess of $100,000 in the aggregate;
(viii) except for the items contemplated by the Company's 1999 capital expenditure budget made available to Purchaser, authorize any new capital expenditures which, individually, is in excess of $100,000 or, in the aggregate, are in excess of $250,000; or
(ix) issue, sell, pledge or dispose of, or agree to issue, sell, pledge or dispose of, any additional shares of, or any options, warrants, conversion privileges or rights of any kind to acquire any shares of, the Company's capital stock (other than the issuance of shares of Common Stock upon the exercise of Options and Company Warrants outstanding on the date of this Agreement and in accordance with their present terms).
(c) split, combine or reclassify or otherwise amend the terms any shares of any membership interest or other security of Sellerits capital stock, (C) declare, authorize, set aside make or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other property) or (D) enter into any agreement with respect than cash dividends and distributions by a wholly owned Subsidiary of the Company to the voting Company or to a Subsidiary all of the capital stock of which is owned directly or indirectly by the Company, or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any equity of Sellerits securities or any securities of its Subsidiaries;
(ivd) (A) merge adopt or, except as required by law, amend any bonus, profit sharing, compensation, severance, termination, stock option, pension, retirement, deferred compensation, employment or consolidate with any employee benefit plan, agreement, trust, plan, fund or other Person, acquire any business or assets arrangement for the benefit and welfare of any other Person director, officer or employee, or (whether except as required by merger, stock purchase, asset purchase law or other business combination), other than the purchase of supplies for normal increases in the Ordinary Course ordinary course of Business business that are consistent with past practices) increase in any manner the compensation or fringe benefits of any director, officer or employee or pay any benefit not required by any existing plan or arrangement (B) form any new Subsidiary;
(v) (A) materially change including, without limitation, the operation granting of the Business, Assets stock options or stock appreciation rights or the Assumed Liabilities removal of existing restrictions in any benefit plans or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of business;
(vi) make any loans, advances or capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of Businessagreements);
(viie) revalue in any material respect any of its assets, including, without limitation, writing down the value of inventory in any material manner or write-off of notes or accounts receivable in any material manner;
(Af) institute pay, discharge or announce satisfy any increase in the compensationmaterial claims, bonuses liabilities or other benefits payable to any Business Employeesobligations (whether absolute, (B) enter intoaccrued, amend asserted or waive any rights under any employmentunasserted, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity contingent or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause)the payment, discharge or satisfaction in the ordinary course of business, consistent with past practices, of liabilities reflected or reserved against in the consolidated financial statements of the Company or incurred since the most recent date thereof pursuant to an agreement or transaction described in this Agreement (including the schedules to this Agreement) or incurred in the ordinary course of business, consistent with past practices;
(viiig) transferexcept as set forth on Schedule 8.2(g), lease, license, guarantee, sell, mortgage, pledge, dispose of make any tax election or incur settle or compromise any Lien on or otherwise encumber material income tax liability;
(h) take any Assets, action other than in the Ordinary Course ordinary course of Businessbusiness and consistent with past practices with respect to accounting policies or procedures other than any change in accounting policies (that is not material to the Company and its Subsidiaries taken as a whole) that is required by regulations of the SEC or a change in generally accepted accounting principles;
(ixi) acquire any real property take or undertake agree or commit to undertake capital expenditures for take any action that would make any representation and warranty of the purchase Company hereunder inaccurate in any respect at, or as of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree any time prior to, request or adopt the Effective Time (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur any Indebtedness or issue any debt securities or warrants or other rights to acquire debt securities of Seller or assume, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person for Indebtedness or capital obligationsor, in the case of representations and warranties 37 that are not qualified by reference to the term "Material Adverse Effect" and/or taken as a whole, or derivatives or variations of such terms, inaccurate in any material respect at, or as of any time prior to, the Effective Time);
(j) amend, waive or otherwise alter any provision of the Thermalloy Agreement; or
(k) agree or commit to do any of the foregoing;
(xii) cancel any debts owed to or claims held by Seller in excess of $35,000;
(xiii) abandon, disclaim, dedicate to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreement;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;
(xv) revalue any of the assets of the Seller, except as required by GAAP, or enter into, or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contract;
(xvi) (A) change any method of accounting or accounting practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Business;
(xvii) make, revoke or change any Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date;
(xviii) modify, amend or terminate (other than pursuant to the expiration of its term other than as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunder;
(xix) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property;
(xx) commence, settle or compromise any Proceeding;
(xxi) cancel, materially reduce or fail to maintain any insurance policy;
(xxii) change or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;
(xxiii) engage in any transaction with any Related Parties; or
(xxiv) authorize or enter into any agreement, commitment or understanding (whether written or oral) with respect to the foregoing.
Appears in 1 contract
Interim Operations. (a) From the date hereof until the earlier of the Closing Date or termination of the date, if any, on which this AgreementAgreement is terminated pursuant to Section 8.1 (the “Termination Date”), the Seller shall cause the Company and each Subsidiary to (i) operate conduct the Business only in the Ordinary Course of Business, including maintaining appropriate service levels, and in compliance with applicable Law including any COVID-19 Measures; Business and (ii) use commercially reasonable best efforts to (A) maintain and preserve intact the business organization and goodwill of the Business, to maintain the Assets Company’s and the Assumed Liabilities, (B) maintain satisfactory each Subsidiary’s relationships with Seller’s clients, operators, distributors, customersthe Clients, insurance underwriters and other third parties having business dealings with Seller, (C) pay its debts the Company or the Subsidiaries and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services of, of the key Business Employees.
(b) Without In furtherance of, and without limiting the generality of the foregoingof, Section 6.1(a), except as set forth in Section 5.1(b) of the Disclosure Schedule, as expressly permitted by this Agreement or as approved in writing by ▇▇▇▇▇the Purchaser (which approval shall not be unreasonably withheld, conditioned or delayed), from the date hereof until the earlier of the Closing Date or the termination of this AgreementTermination Date, neither the Company nor any Subsidiary shall (and the Seller shall not take permit the Company or any action which would require disclosure on Section 2.8 of the Disclosure Schedule or:Subsidiary to):
(i) take or omit to take any action that results or may reasonably be expected to result in any of the representations and warranties of the Seller or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions precedent set forth herein in Sections 7.1 and 7.3 not being satisfied;
(ii) amend or otherwise change the organizational documents of SellerOrganizational Documents;
(iii) (A) authorize, issue, sell or transfer any membership interests Shares or other equity securities of Sellerthe Company or any Subsidiary, (B) adjust, split, combine or combine, reclassify or otherwise amend the terms of redeem any membership interest Shares or other security of Seller, (C) declare, authorize, set aside make or pay any dividend or other distribution (whether in cash, stock or other property) or (D) enter into any agreement with in respect to the voting of any equity of SellerShares;
(iv) (A) merge or consolidate with any other Person, acquire any business or assets of any other Person (whether by merger, stock purchase, asset purchase or other business combination), other than the purchase of supplies in the Ordinary Course of Business ) or (B) form any new Subsidiarysubsidiary;
(v) adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(Avi) materially make any material change in the operation of the Business, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of businessApplicable Law;
(vivii) enter into, amend in any material respect or terminate (other than in accordance with its terms) any Material Contract, or waive, release or assign any rights or claims thereunder;
(viii) sell, lease (as lessor), transfer or otherwise dispose of, or mortgage, encumber, pledge or impose any Lien on, any assets or properties of the Company or any Subsidiary, other than dispositions of immaterial assets or properties in the Ordinary Course of Business for fair value;
(ix) create, incur, assume or guarantee any Indebtedness, or extend or modify any existing Indebtedness;
(x) make any loans, advances or capital contributions to, or investments in, any Person Person;
(xi) cancel any debts owed to, or waive any claims or rights held by, the Company or any Subsidiary;
(xii) commence, settle or compromise any Action by or against the Company or any Subsidiary, other than advances of expenses to Business Employees settlements entered into in the Ordinary Course of Business)Business that require only the payment of monetary damages in an aggregate amount not to exceed $25,000;
(viixiii) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business EmployeesEmployee, (B) enter into, into or amend or waive any rights under any employment, consulting, deferred compensation, severance or change of control agreement with any Business Employee, or (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, adopt or amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on or otherwise encumber any Assets, other than in the Ordinary Course of Business;
(ix) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur any Indebtedness or issue any debt securities or warrants or other rights to acquire debt securities of Seller or assume, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person for Indebtedness or capital obligations, in the case of any of the foregoing;
(xii) cancel any debts owed to or claims held by Seller in excess of $35,000;
(xiii) abandon, disclaim, dedicate to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP AgreementPlan;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;
(xv) revalue any of the assets of the Seller, except as required by GAAP, or enter into, or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contract;
(xvi) (A) change any method of accounting or accounting practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Business;
(xvii) make, revoke or change any Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date;
(xviii) modify, amend or terminate (other than pursuant to the expiration of its term other than as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunder;
(xix) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property;
(xx) commence, settle or compromise any Proceeding;
(xxi) cancel, materially reduce or fail to maintain any insurance policy;
(xxii) change or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;
(xxiii) engage in any transaction with any Related PartiesAffiliates, except transactions that are at prices and on terms and conditions not less favorable to the Company or the Subsidiaries than could be obtained on an arm’s-length basis from unrelated third parties;
(xv) change any accounting methods, policies or procedures, other than as required by Applicable Law or GAAP;
(xvi) fail to pay any accounts payable when due (other than amounts being contested in good faith) or fail to use commercially reasonable efforts to collect any accounts receivable when due;
(xvii) take any action that is intended or would reasonably be expected to result in any of the conditions of the Closing set forth in Article 7 not being satisfied, except, in every case, as may be required by Applicable Law; or
(xxivxviii) authorize or enter into any agreement, commitment or understanding (whether written or oral) with respect to any of the foregoing.
(c) From the date hereof until the Closing Date, neither the Company nor any Subsidiary shall make, rescind, or change any election with respect to Taxes; change any Tax accounting period; adopt or change any method of Tax accounting; file any amended Tax Return; enter into an agreement with respect to Taxes with any Governmental Authority (including a “closing agreement” under Code section 7121); surrender any right to claim a refund for Taxes; consent to an extension of the statute of limitations applicable to any Tax claim or assessment; or take any other similar action.
Appears in 1 contract
Sources: Stock Purchase Agreement (First Financial Holdings Inc /De/)
Interim Operations. (a) From the date hereof of this Agreement until the earlier applicable Closing, except with the prior written consent of the Closing Purchaser (which consent may not be unreasonably withheld, delayed or termination of conditioned), as required or expressly permitted by this Agreement or any other Transaction Agreement, as required by applicable Law or Order, or as expressly set forth on Schedule 5.1, each of the Acquired Company, each Seller and each other member of the Seller Group shall (i) operate conduct the Business and use and/or hold for use the Acquired Assets only in the Ordinary Course and in material compliance with all applicable Laws and Orders; (ii) use Reasonable Efforts to (A) preserve intact the Business and the Acquired Assets, (B) maintain its rights and franchises with respect to the Business and the condition of the Acquired Assets (except for ordinary wear and tear), (C) maintain the Business’ goodwill and existing relationships with customers, suppliers and distributors and any other Persons with whom it has a significant business relationship and (D) perform in all material respects all of its obligations under all Assumed Contracts and Acquired Company Contracts; and (iii) pay all accounts payable of the Business and collect all accounts receivable of the Business only in the Ordinary Course of Business, including maintaining appropriate service levels, and in compliance with applicable Law including any COVID-19 Measures; and (ii) use commercially reasonable efforts to (A) maintain and preserve intact the business organization and goodwill of the Business, the Assets and the Assumed Liabilities, (B) maintain satisfactory relationships with Seller’s clients, operators, distributors, customers, insurance underwriters and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services of, the Business EmployeesCourse.
(b) Without limiting the generality of the foregoing, from the date of this Agreement until the applicable Closing, except as set forth in Section 5.1(b) with the prior written consent of the Disclosure SchedulePurchaser (which consent may not be unreasonably withheld, delayed or conditioned), as required or expressly permitted by this Agreement or any other Transaction Agreement, as approved required by applicable Law or Order, or as expressly set forth in writing by ▇▇▇▇▇the corresponding subsection of Schedule 5.1, from the date hereof until Acquired Company and, only as with respect to the earlier Business, the Sellers and the members of the Closing or the termination of this AgreementSeller Group, Seller shall not take any action which would require disclosure on Section 2.8 of the Disclosure Schedule orfollowing actions:
(i) take except as listed on Schedule 5.1(b)(i) or omit to take as required by Law or Order or by the terms of any action that results plans, programs or may reasonably be expected to result in any arrangements existing as of the representations and warranties date of Seller this Agreement, or incident to an amendment to any benefit plan or program applicable generally to employees or to groups of employees covered by such plan or program, (A) grant or announce any increase or improvement in the Beneficial Owners set forth herein being remuneration, benefits or becoming untrue terms of employment of any Employee of the Business, (B) enter into any new or amend in any material respect any existing employment, indemnification, severance, retention, change in control or in similar agreement that relates to the Business (other than new agreements or amendments to existing agreements to reflect changes affecting employees of any member of EMC or its Subsidiaries generally), (C) amend any existing Seller Benefit Plan or enter into any new employee benefit plan made available to any Employee of the conditions set forth herein Business, (D) except in the Ordinary Course as required to replace headcount lost due to turnover, hire or transfer any officer, employee, independent contractor or consultant into the Business with an aggregate compensation package or annual cost, as applicable, exceeding $100,000, (E) settle, or offer or propose to settle or otherwise resolve any claim, suit, audit, investigation or proceeding involving or against any member of the Seller Group relating to, arising out of or resulting from the employment or potential employment of any person (a “Proposed Employment Settlement”) (x) having an overall dollar value of (1) $100,000 or more in the case of any individual Proposed Employment Settlement or (2) $500,000 or more in the aggregate, when combined with the overall dollar value of every other Proposed Employment Settlement or (y) that does not being satisfiedinclude a full, complete and unconditional release of the Seller Group or (F) enter into or amend the terms of any collective bargaining agreements;
(ii) amend purchase, lease, acquire (including by merger, consolidation or otherwise change acquisition of stock, shares or assets) any entity, business or portion of the organizational documents assets of Sellerany Person that would reasonably be expected to materially increase the Assumed Liabilities, other than purchases of inventory and supplies in the Ordinary Course;
(iii) (A) authorizeadopt a plan to, issuein whole or part, sell directly or indirectly, liquidate, dissolve, merge, consolidate, sell, lease, exchange, mortgage, pledge, transfer any membership interests or otherwise dispose of or recapitalize the Acquired Company or its assets, except for sales of Inventory in the Ordinary Course or other securities of Seller, (B) adjust, split, combine immaterial sales or reclassify or otherwise amend the terms of any membership interest or other security of Seller, (C) declare, authorize, set aside make or pay any dividend or other distribution (whether in cash, stock or other property) or (D) enter into any agreement with respect to the voting of any equity of Sellerdispositions;
(iv) (A) merge with respect to any member of the Seller Group, file a petition in bankruptcy under any provisions of federal or consolidate with any other Person, acquire any business state or assets foreign bankruptcy Law or consent to the filing of any other Person (whether by merger, stock purchase, asset purchase or other business combination), other than the purchase of supplies in the Ordinary Course of Business or (B) form any new Subsidiarybankruptcy petition;
(v) (A) materially change in any material respect the operation accounting methods, principles or practices in connection with the Business except as required by a change in GAAP or if required after the closing of the BusinessDell Acquisition to align such methods, Assets principles or practices with Dell’s methods, principles or practices, but only to the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of businessextent so required;
(vi) make (A) change in any loans, advances material respect the policies or capital contributions to, practices related to the Business regarding accounts receivable or investments in, any Person accounts payable or (B) other than advances of expenses to Business Employees in the Ordinary Course Course, accelerate the generation of accounts receivable or increase deferred revenue, in each case related to the Business);
(vii) sell, lease, exchange, mortgage, pledge, transfer or otherwise dispose of any Acquired Assets (other than Intellectual Property) or any interest therein, except for: (A) institute or announce any increase sales of Inventory in the compensation, bonuses Ordinary Course or other benefits payable to any Business Employees, immaterial sales or dispositions; or (B) enter into, amend products and services sold or waive any rights under any employment, consulting, severance or change assets otherwise disposed of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause)in the Ordinary Course;
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of assign or incur subject to any Lien on or otherwise encumber any Assets, Encumbrance (other than Permitted Encumbrances) any Intellectual Property constituting an Acquired Asset, or license any Product Proprietary Software or any other material Intellectual Property constituting an Acquired Asset, except for non-exclusive licenses to Intellectual Property to (A) customers solely for use of the Transferred Products in object code form or, in limited circumstances for the customers’ sole internal use and subject to confidentiality obligations, in source code form and (B) resellers and distributors for the purposes of reselling and distributing the Transferred Products, in each case granted in the Ordinary Course Course; or take any action or fail to take any action, if such action or failure to take action would reasonably be likely to result in the loss, lapse, abandonment, invalidity or unenforceability of Businessany Intellectual Property Registrations or other material Intellectual Property;
(ix) acquire incorporate into any real property or undertake or commit to undertake capital expenditures for Transferred Product any Third Party Embedded Software that is not incorporated therein as of the purchase of equipment or tangible assets exceeding $35,000 in the aggregatedate hereof;
(x) agree to, request incur or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur guarantee any Indebtedness for which the Purchaser or issue any debt securities the Acquired Company would be responsible for repaying after the Initial Closing Date or warrants or other rights to acquire debt securities of Seller which would become an Assumed Liability, or assume, guarantee or endorse, as an accommodation or otherwise, the endorse such obligations of any Person for Indebtedness or capital obligations, in the case of any of the foregoing;
(xii) cancel any debts owed to or claims held by Seller in excess of $35,000;
(xiii) abandon, disclaim, dedicate to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreement;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any other Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;
(xv) revalue any of the assets of the Seller, except as required by GAAP, or enter into, or permit any of the assets of the Seller Acquired Assets to become bound by subject to any Contract that is or would constitute Encumbrance, other than a Material ContractPermitted Encumbrance;
(xvixi) (A) change any method of accounting or accounting practicewaive, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Business;
(xvii) make, revoke or change any Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date;
(xviii) modify, amend or terminate (other than pursuant to the expiration of its term other than as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunderClaims of the Acquired Company or the Business to the extent constituting, relating to or arising from the Acquired Assets or Assumed Liabilities;
(xii) (A) accelerate, terminate, cancel, grant a waiver under or otherwise modify in any material respect any Assumed Contract or Acquired Company Contract or (B) accelerate, terminate, cancel, grant a waiver under or otherwise modify in any material respect any Assumed Real Property Lease or Acquired Company Lease, or enter into any new sublease, license or similar occupancy agreement with respect to any portion of the premises subject to any Assumed Real Property Lease or Acquired Company Lease;
(xiii) except in the Ordinary Course (and, for the avoidance of doubt, in compliance with subsection (xiv) below), enter into, renew, extend, or amend on terms less favorable in the aggregate to the Seller Group than existing on the date hereof, any Assumed Contract or Acquired Company Contract or Assumed Real Property Lease or Acquired Company Lease;
(xiv) enter into, renew or extend the term of any Contract related to the Business with any Customer without, in each case, first using Reasonable Efforts to (A) ensure that such Contract is exclusively related to the Business, (B) limit the term of such Contract to no more than twelve (12) months, (C) provide that such Contract may be assigned, in whole or in part, by the Seller Group to a third party without the prior consent of such Customer and (D) provide that the obligations of the Seller Group may be performed by subcontractors;
(xv) settle or compromise, or agree to the entry of any Order in respect of, any Claim or Legal Proceeding involving or affecting any of the Acquired Assets or Assumed Liabilities or the Acquired Company or the Business other than settlements, compromises and Orders which are immaterial or which do not impose any material limitations on the conduct or operation of the Business or include any material obligations that would be binding on a member of the Purchaser Group or the Acquired Company following the applicable Closing;
(xvi) make any new commitments for capital expenditures in excess of $1,000,000 in the aggregate or increase any previous commitments for capital expenditures by more than $1,000,000 in the aggregate;
(xvii) enter into any Contract materially limiting or purporting to materially limit the ability of the Business to compete in any line of business or with any Person or in any geographic area or during any period of time following the termination of such Contract (excluding any covenants relating to the non-solicitation of employees or service providers agreed to in the Ordinary Course);
(xviii) issue, sell, pledge, grant, transfer, encumber or otherwise dispose of any shares in the capital or other equity securities of the Acquired Company, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares in the capital or other equity securities of the Acquired Company or any share appreciation rights, restricted shares, share-based performance units, “phantom” share awards or other rights that are linked to the value of shares in the capital or the value of the Acquired Company or any part thereof;
(xix) fail to pay any required maintenance reclassify, split, combine, subdivide or other similar fees redeem, purchase or otherwise fail to make required filings acquire, directly or payments required to maintain and further prosecute indirectly, any applications of the shares in the capital of or securities convertible or exchangeable into or exercisable for registration any shares in the capital of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Propertythe Acquired Company;
(xx) commencemake any amendment to the Acquired Company’s certificate of incorporation, operating agreement or any other organizational and governance documents;
(xxi) allow or cause the Acquired Company to do any of the following: make, change, or rescind any material election relating to Taxes, settle or compromise any Proceeding;
(xxi) cancelmaterial claim, materially reduce action, suit, litigation, proceeding, arbitration, investigation, audit, or fail controversy relating to maintain Taxes, agree to any insurance policymaterial adjustment of any Tax attribute, surrender any material right or claim to a refund of Taxes, amend any material Tax Return, consent to any extension or waiver of the statute of limitations period applicable to any Taxes, Tax Returns or claims for Taxes, or enter into any closing agreements with any Taxing Authority with respect to Taxes;
(xxii) change enter into or modify renew any Contract that would constitute an Assumed Contract or an Acquired Company Contract with the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) Customer identified in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;Schedule 5.1(b)(xxii); or
(xxiii) engage in authorize, commit or agree to do any transaction with any Related Parties; or
(xxiv) authorize or enter into any agreement, commitment or understanding (whether written or oral) with respect to of the foregoing.
(c) Notwithstanding anything to the contrary in Sections 5.1(a) and (b) above, prior to the Initial Closing, the Acquired Company is permitted to settle all intercompany accounts with members of the Seller Group and to distribute the net cash held by it after any such settlement of intercompany accounts as a dividend, reduction of share capital or any other form of return of funds to its shareholder.
Appears in 1 contract
Interim Operations. (a) From After the date hereof until and prior to the earlier of Closing, Seller covenants and agrees to cause each Acquired Entity to conduct its business in the Closing or termination of this Agreementordinary and usual course and, to the extent consistent therewith, Seller shall (i) operate the Business only in the Ordinary Course of Business, including maintaining appropriate service levels, and in compliance with applicable Law including any COVID-19 Measures; and (ii) cause each Acquired Entity to use its respective commercially reasonable efforts to (Ax) preserve its business organizations intact and maintain and preserve intact the business organization existing relations and goodwill of the Businesswith all Governmental Entities, the Assets and the Assumed Liabilitiescustomers, (B) maintain satisfactory relationships with Seller’s clients, operatorssuppliers, distributors, customerscreditors, insurance underwriters lessors, employees and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits associates and (Ey) maintain good relations with, and keep available the services of, the Business Employees.
(b) of its present key employees and key agents. Without limiting the generality of the foregoing, except as set forth foregoing and in Section 5.1(b) of the Disclosure Schedule, as expressly permitted by this Agreement or as approved in writing by ▇▇▇▇▇furtherance thereof, from the date hereof of this Agreement until the earlier of the Closing or the termination of Closing, except (A) as otherwise expressly contemplated by this Agreement, (B) as Buyer may approve in writing or (C) for transactions set forth on Schedule 5.1, Seller shall cause each Acquired Entity not take any action which would require disclosure on Section 2.8 of the Disclosure Schedule orto:
(i) take or omit to take any action that results or may reasonably be expected to result in any of the representations and warranties of Seller or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfied;
(ii) amend or otherwise change the organizational documents of Seller;
(iii) (A) authorize, issue, sell or transfer any membership interests or other securities of Seller, (B) adjust, split, combine or reclassify its capital stock, (B) grant (whether or otherwise amend the terms of not for consideration) any membership interest Person any option or other security right to acquire any shares of Sellercapital stock or other securities, (C) declare, authorize, set aside make or pay any dividend or other distribution issue (whether in cash, or not for consideration) any shares of capital stock or other property) securities, or (D) enter into any agreement Contract with respect to the voting sale, voting, registration or repurchase of capital stock or other securities;
(ii) declare or pay any non-cash dividend or make any non-cash distribution in respect of, or repurchase or redeem, any shares of capital stock;
(iii) directly or indirectly sell, transfer, pledge, otherwise create any Encumbrance on or otherwise dispose of any equity assets, except for sale of Sellerproducts and services in the ordinary course of business;
(iv) amend its governing documents;
(Av) merge or consolidate with any other Person, ;
(vi) acquire any business assets (other than in the ordinary course of business) or assets capital stock or other securities of any other Person (whether by merger, stock purchase, asset purchase or other business combination), other than the purchase of supplies in the Ordinary Course of Business or (B) form any new SubsidiaryPerson;
(vvii) (A) enter into or materially change modify any material employment, consulting, severance, stay-pay, termination or similar Contracts with, or grant any bonuses, equity awards, salary increases, severance, pension, retirement or termination pay to, any Employee, or otherwise materially increase the operation of the Business, Assets compensation or the Assumed Liabilities or benefits provided to any method of purchase, sale, lease, management, marketing, promotion or operationEmployee, except such changes as may be required by existing Contract or in the ordinary course of business;
(viii) enter into or adopt any new Company Benefit Plan or materially increase benefits under or renew, amend or terminate any Company Benefit Plan, except as may be required by applicable Law;
(ix) hire any new Employees, except in the ordinary course of business with respect to comply Employees with an annual base salary and incentive compensation opportunity not to exceed $100,000;
(A) make any Law material Tax election (other than such elections which are consistent with the most recent past practice of the relevant Acquired Entity) or the terms rescind or change any material Tax election or adopt or change any method of this Agreement or accounting, (B) enter into any settlement of or compromise any material Tax liability, (C) change any annual Tax accounting period, (D) enter into a new line closing agreement for any material amount of business Tax, (E) surrender any right to any material Tax refund or abandon (F) file any amended Tax Return or discontinue an existing line refund claim with respect to any material Tax;
(xi) materially amend or terminate, or waive, release or assign any material rights or claims with respect to any Material Contract or material Permit, other than in the ordinary course of business;
(vi) make any loans, advances or capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of Business);
(vii) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employees, (Bxii) enter into, amend or waive into any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on or otherwise encumber any AssetsContract that would constitute a Material Contract, other than in the Ordinary Course ordinary course of Business;
(ix) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur any Indebtedness or issue any debt securities or warrants or other rights to acquire debt securities of Seller or assume, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person for Indebtedness or capital obligations, in the case of any of the foregoing;
(xii) cancel any debts owed to or claims held by Seller in excess of $35,000business;
(xiii) abandonenter into, disclaimamend, dedicate to terminate or waive any provision of any Contract with Seller or any of its Subsidiaries or enter into any new transaction with Seller or any of its Subsidiaries, other than in the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreementordinary course of business;
(xiv) disclose enter into, amend, renew, terminate or materially increase benefits under any confidential labor or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Sellercollective bargaining agreement;
(xv) revalue incur any indebtedness for borrowed money, other than in the ordinary course of the assets of the Seller, except as required by GAAP, or enter into, or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contractbusiness;
(xvi) (A) change any method of accounting or accounting practicepractice or policy used by the Acquired Entities, other than such changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Businessby GAAP;
(xvii) make, revoke or change fail to exercise any Tax election rights of renewal with respect to any material Leased Real Property that by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Dateits terms would otherwise expire;
(xviii) modify, amend settle or terminate (other than pursuant to the expiration of its term other than as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign compromise any material rights or claims thereunderClaims;
(xix) fail to pay forgive or cancel any required maintenance material Debts or other similar fees terminate or otherwise fail to make required filings or payments required to maintain and further prosecute waive any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Propertymaterial rights;
(xx) commence, settle incur any capital expenditure or compromise any Proceedingcommitment in excess of the annual capital expenditure budget of the Acquired Entities previously provided to Buyer;
(xxi) cancelenter into any commodity hedging, materially reduce foreign exchange hedging or fail to maintain any insurance policy;other type of financial instrument other than in the ordinary course of business; or
(xxii) change or modify agree to take any of the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;
(xxiii) engage in any transaction with any Related Parties; or
(xxiv) authorize or enter into any agreement, commitment or understanding (whether written or oral) with respect to the foregoingforegoing actions.
Appears in 1 contract
Sources: Stock Purchase Agreement (Aleris International, Inc.)
Interim Operations. (a) From The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof until and prior to the earlier Effective Time (unless Parent shall otherwise approve in writing (such approval not to be unreasonably withheld, delayed or conditioned)), and except as otherwise expressly contemplated by this Agreement or required by applicable Laws, the Company and its Subsidiaries shall cause the business of the Closing or termination of this Agreement, Seller shall (i) operate the Business only it and its Subsidiaries to be conducted in the Ordinary Course of Businessordinary course consistent with past practice and, including maintaining appropriate service levelsto the extent consistent therewith, it and in compliance with applicable Law including any COVID-19 Measures; and (ii) its Significant Subsidiaries shall use commercially their respective reasonable efforts to (A) preserve their business organizations intact and maintain and preserve intact the business organization existing relations and goodwill of the Business, the Assets and the Assumed Liabilities, (B) maintain satisfactory relationships with Seller’s clients, operators, distributorsGovernmental Entities, customers, insurance underwriters suppliers, employees and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services of, the Business Employees.
(b) associates. Without limiting the generality of the foregoing, and in furtherance thereof, from the date of this Agreement until the Effective Time, except (A) as otherwise contemplated or specifically permitted by this Agreement, (B) as Parent may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned), (C) as is reasonably responsive to a requirement of applicable Law or any Governmental Entity or (D) as set forth in Section 5.1(b) 6.1 of the Company Disclosure Schedule, as expressly permitted by this Agreement or as approved in writing by ▇▇▇▇▇, from the date hereof until the earlier of the Closing or the termination of this Agreement, Seller shall Company will not take any action which would require disclosure on Section 2.8 of the Disclosure Schedule orand will not permit its Subsidiaries to:
(i) take adopt any change in its certificate of incorporation or omit to take any action that results bylaws or may reasonably be expected to result in any of the representations and warranties of Seller or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfiedother applicable governing instruments;
(ii) amend merge or otherwise change consolidate the organizational documents Company or any of Sellerits Subsidiaries with any other Person;
(iii) make any acquisition of assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of $30 million in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than (A) authorizethe issuance of Shares upon the settlement of performance units, issuerestricted stock awards and other awards under the Stock Plans (and dividend equivalents thereon, sell if applicable) or transfer any membership interests or other securities of Seller, (B) adjustthe issuance of shares by a wholly-owned Subsidiary of the Company to the Company or another wholly-owned Subsidiary), splitor securities convertible or exchangeable into or exercisable for any shares of such capital stock, combine or reclassify any options, warrants or otherwise amend the terms other rights of any membership interest kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) make any loans, advances or capital contributions to or investments in any Person (other security than the Company or any direct or indirect wholly-owned Subsidiary of Seller, the Company) in excess of $30 million in the aggregate;
(Cvi) declare, authorizeset aside, set aside make or pay any dividend or other distribution (whether distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except (A) regular quarterly dividends paid to holders of Shares in the ordinary course consistent with past practice (including with respect to the record dates for such dividends) in an amount not to exceed $0.03 per Share, and (B) dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other propertydirect or indirect wholly-owned Subsidiary) or (D) enter into any agreement with respect to the voting of any equity of Sellerits capital stock;
(ivvii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than the acquisition of any Shares tendered by current or former employees or directors in order to pay Taxes in connection with the settlement of performance units, restricted stock awards and other awards under the Stock Plans and other than in connection with a customary cashless exercise of Company Options);
(viii) (A) merge incur, issue, modify, renew, syndicate or consolidate with refinance any Indebtedness (other Personthan any letters of credit issued in the ordinary course of business, acquire any business or assets the refinancing of any other Person existing Indebtedness of the Company in the ordinary course of business (whether by mergerprovided that such refinancing Indebtedness so incurred must be voluntarily prepayable without premium, stock purchase, asset purchase penalties or other business combination), other than the purchase costs in excess of supplies $2 million in the Ordinary Course aggregate) and any Contracts relating to interest rate protection, swap agreements and collar agreements entered into in the ordinary course of Business business; provided, that the Company shall consult in good faith with Parent prior to entering into, amending or otherwise modifying, or agreeing in principle to, any Contract relating to or reflecting any hedging arrangement that is material for the Company and its Subsidiaries taken as a whole) having an outstanding principal amount in excess of (1) $5 million per individual incurrence or (B2) form $50 million in the aggregate, provided that, in each case, any new Subsidiary;
(v) (A) materially change the operation of the BusinessIndebtedness so incurred must be voluntarily prepayable without premium, Assets penalties or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement other costs or (B) enter into a new line of business or abandon or discontinue an existing line of business;
(vi) make any loans, advances or capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of Business);
(vii) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on or otherwise encumber any Assets, swap transaction other than in the Ordinary Course ordinary course of Businessbusiness consistent with past practice; provided, that the Company shall consult in good faith with Parent prior to entering into, amending or otherwise modifying, or agreeing in principle to, any Contract relating to or reflecting any hedging arrangement that is material for the Company and its Subsidiaries taken as a whole;
(ix) acquire except as set forth in the capital budgets set forth in Section 6.1(a)(ix) of the Company Disclosure Schedule in the ordinary course of business consistent with past practice or for expenditures related to operational emergencies, make or authorize any real property or undertake or commit to undertake capital expenditures for the purchase expenditure in excess of equipment or tangible assets exceeding $35,000 50 million in the aggregate;
(x) agree to, request or adopt (A) make any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official material changes with respect to Sellerfinancial or Tax accounting policies or procedures, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts except as they become due, or (D) any other thing under any required by applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C)by changes in GAAP;
(xi) incur settle any Indebtedness or issue any debt securities or warrants litigation or other rights proceedings before a Governmental Entity (other than with respect to acquire debt securities any Tax audits, litigation or proceedings) for an amount in excess of Seller $10 million individually or assume, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person for Indebtedness or capital obligations, $30 million in the case of any of the foregoingaggregate;
(xii) cancel other than in the ordinary course of business consistent with past practice or except to the extent required by Law, make any debts owed to or claims held by Seller in excess of $35,000material Tax election;
(xiii) abandonexcept in the ordinary course of business, disclaimenter into any settlement, dedicate compromise or closing agreement with respect to any material Tax liability or Tax refund, file any amended Tax Return with respect to any material Tax, or waive or extend the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreementstatute of limitations in respect of material Taxes;
(xiv) disclose transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any confidential material amount of assets, product lines or proprietary information businesses of the Company or confidential Business Intellectual Property to its Subsidiaries, including capital stock of any Personof its Subsidiaries, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to Contracts in force on the date of this Agreement, transactions solely among the Company and/or its wholly-owned Subsidiaries that would not result in a written agreement with material increase in the SellerTax liability of the Company and its Subsidiaries or in the ordinary course of business and other than pursuant to Contracts in effect prior to the date of this Agreement;
(xv) revalue any of the assets of the Seller, except as required pursuant to agreements in effect prior to the date of this Agreement or as otherwise required by GAAPapplicable Law, (A) grant or enter into, provide any severance or permit termination payments or benefits to any director or employee of the Company or any of the assets its Subsidiaries except with respect those employees who are not executive officers of the Seller Company or any Subsidiary of the Company in the ordinary course of business consistent with past practice, (B) increase the compensation to become bound by any Contract director or employee of the Company or any of its Subsidiaries in excess of the 2010 amounts budgeted with respect thereto on the date hereof and otherwise in the ordinary course of business consistent with past practice, (C) establish, adopt, terminate or materially amend any Benefit Plan (other than routine changes to welfare plans) or any plan, program, arrangement, policy or agreement that is would be a Benefit Plan if it were in existence on the date hereof or would constitute (D) grant any equity or equity-based awards, except that (1) the Company may grant time-based restricted stock units in respect of no more than 1,227,270 Shares to employees of the Company and its Subsidiaries, other than those employees who are eligible to receive grants under the Company’s Long-Term Incentive Program on the date hereof (such employees, the “LTIP Eligible Employees”), in the ordinary course of business and consistent with past practices with respect to the allocation of awards and otherwise subject to the terms of Section 6.1(e) below, (2) the Company may grant performance-based restricted stock unit awards in respect of no more than 590,909 shares under the Company’s Long Term Incentive Program with respect to the 2010-2011 performance cycle to LTIP Eligible Employees in the ordinary course of business and consistent with past practices with respect to the allocation of awards and otherwise subject to the terms of Section 6.1(f) below and (3) the Company may grant PERS awards for 2010 to the individuals listed on Section 6.1(a)(xv)(D)(3) of the Company Disclosure Schedule, in respect of no more than 104,545 shares, in the ordinary course of business and consistent with past practices with respect to the allocation of awards; provided, however, that the Company or a Material ContractSubsidiary of the Company may make offers of employment to newly hired non-executive employees in the ordinary course of business consistent with past practice that are not inconsistent with the terms of this subsection (xv);
(xvi) (A) change adopt a plan or agreement of complete or partial liquidation or dissolution of the Company or any method of accounting or accounting practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Businessits Significant Subsidiaries;
(xvii) make, revoke or change grant any Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests Lien other than Permitted Liens and except in Buyer) after the Closing Dateconnection with Indebtedness permitted under Section 6.1(a)(viii);
(xviii) modify(A) enter into any Collective Bargaining Agreement or other similar agreement with any labor union, amend works council or terminate other collective bargaining organization or (other than pursuant B) engage in information and consultation with any works council or similar organization in relation to reductions in force or workforce restructuring, which materially increases the expiration financial obligations of the Company or any of its term other than as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunderSubsidiaries;
(xix) fail to pay in the case of Subsidiaries of the Company which are organized in jurisdictions other than a state of the United States, make any required maintenance investment in debt or other similar fees equity securities issued by the Company or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Propertyits Subsidiaries organized under the laws of a state of the United States;
(xx) commencepermit any of its Subsidiaries or Affiliates or any of its or their respective directors, settle officers, managers, employees, independent contractors, representatives or compromise agents to promise, authorize or make any Proceeding;payment to, or otherwise contribute any item of value to, directly or indirectly, any non-U.S. official, in each case, in violation of the FCPA; or
(xxi) cancelagree, materially reduce authorize or fail commit to maintain do any insurance policy;of the foregoing.
(xxiib) change Parent shall not knowingly take or modify the Seller’s credit, collection, permit any of its Affiliates to take any action that could reasonably be expected to prevent or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) delay in any material respect the consummation of the Merger.
(c) If the Company identifies any activities of the Company or fail any of its Subsidiaries, including those activities of their respective directors, officers, managers, employees, independent contractors, representatives or agents, that the Company reasonably believes (following due inquiry) to pay be in violation of the FCPA, the Company shall and shall cause each of its Subsidiaries and Affiliates to cease such activities. The Company shall and shall cause its Subsidiaries and Affiliates to take all actions required by law to remediate any actions taken by the Company, its Subsidiaries or delay payment Affiliates, or any of payables their respective directors, officers, managers, employees, independent contractors, representatives or other Liabilities agents in violation of the FCPA.
(d) The Company shall (i) give Parent prompt notice of any inquiry, in any material respect;
(xxiii) engage in any transaction with any Related Parties; or
(xxiv) authorize or enter into any agreementform, commitment or understanding (whether written or oral) , from the PBGC or The Pensions Regulator with respect to any Benefit Plan that is subject to Title IV of ERISA or any Non-U.S. Benefit Plan located in the foregoingUnited Kingdom, as applicable, (ii) permit Parent to participate in all negotiations and proceedings with, or initiated by, such entities, (iii) control such negotiations and any settlements, provided, however, that, without Parent’s consent, which shall not unreasonably be withheld, the Company may not commit itself under this Section 6.1(d) to any material obligations, whether effective prior to or after the Closing; and further provided, that the Company shall cooperate with Parent and shall take all actions reasonably requested to facilitate communication and negotiations, if reasonably determined by Parent to be appropriate, with the trustees of the Foreign Pension Plan in the United Kingdom between the date hereof and the Effective Time.
(e) The Company agrees that any awards granted pursuant to Section 6.1(a)(xv)(D)(1) above shall vest in equal installments on each of the first four anniversaries and shall provide, and shall require the grantee of such award as a condition to the receipt of such award to agree, that, notwithstanding any provision of this Agreement, any other agreement or plan to the contrary, upon a “change in control” (which shall include the consummation of the transactions contemplated by this Agreement), subject to the grantee remaining employed on such date, the award shall vest pro-rata based on number of months that have elapsed from January 1, 2010 through and including the month in which the change in control occurs relative to 48 months and shall further provide that any portion of the award that is unvested at the time such change in control occurs shall terminate with no consideration due to the grantee. The portion of the grant document relating to the terms and conditions set forth in this Section 6.1(e) and matters associated therewith shall be subject to the review of and consent by Parent, which shall not be unreasonably withheld.
(f) The Company agrees that any awards granted pursuant to Section 6.1(a)(xv)(D)(2) above shall vest in equal installments on each of the first two anniversaries and shall provide, and shall require that the grantee of such award as a condition to the receipt of such award to agree, that, notwithstanding any provision of this Agreement, any other agreement or plan to the contrary, upon a “change in control” (which shall include the consummation of the transactions contemplated by this Agreement), subject to the grantee remaining employed on such date, the award shall vest pro-rata based on number of months that have elapsed from January 1, 2010 through and including the month in which the change in control occurs based on target performance and shall further provide that any portion of the award that is unvested at the time such change in control occurs relative to 24 months shall terminate with no consideration due to the grantee. The Company shall further require that the grantee of such award agree as a condition to the receipt of such award that in no event shall Section 4(d) of the Company’s Long Term Incentive Program apply to such award. The portion of the grant document relating to the terms and conditions set forth in this Section 6.1(f) and matters associated therewith shall be subject to the review of and consent by Parent, which shall not be unreasonably withheld.
(g) Nothing contained in this Agreement is intended to give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time, and nothing contained in this Agreement is intended to give the Company, directly or indirectly, the right to control or direct Parent’s or its Subsidiaries’ operations. Prior to the Effective Time, each of Parent and the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Su
Appears in 1 contract
Sources: Merger Agreement (Ims Health Inc)
Interim Operations. (a) From The Company shall, and shall cause its Subsidiaries to, between the date hereof until the earlier of and the Closing or earlier termination of this AgreementAgreement (except in each case as referred to in Section 7.1(b) or as may be approved by Parent (such approval not to be unreasonably withheld, Seller shall conditioned or delayed)), (i1) operate the Business only carry on their respective businesses in the Ordinary Course ordinary course of Business, including maintaining appropriate service levels, and business in compliance all material respects consistent with applicable Law including any COVID-19 Measures; past practice and (ii2) use commercially reasonable efforts to (A) maintain and preserve intact the in all material respects its business organization and goodwill of the Business, the Assets and the Assumed Liabilities, (B) maintain satisfactory relationships with Seller’s clients, operators, distributors, customers, insurance underwriters and other third parties having advantageous business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations withrelationships. In addition to, and keep available the services of, the Business Employees.
(b) Without without limiting the generality of the foregoing, except as set forth in Section 5.1(b) of the Disclosure Schedule, as expressly permitted by this Agreement or as approved in writing by ▇▇▇▇▇, from between the date hereof until the earlier of and the Closing or the earlier termination of this AgreementAgreement (except in each case as referred to in Section 7.1(b) or as may be approved by Parent), Seller the Company shall not, and shall cause its Subsidiaries not take any action which would require disclosure on Section 2.8 to (provided only clauses (xxi) and (xxii) below shall apply to actions of the Disclosure Schedule or:Company or its Subsidiaries taken with respect to Financial Advisors or prospective Financial Advisors):
(i) take or omit to take amend any action that results or may reasonably be expected to result in any provision of the representations and warranties of Seller or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any Constituent Documents of the conditions set forth herein not being satisfiedCompany other than amendments which are ministerial in nature;
(ii) amend sell, pledge, transfer, dispose of, encumber (other than Permitted Encumbrances), create, redeem, repurchase, acquire, allot or otherwise change issue, or grant an option to subscribe for, any Equity Interest in the organizational documents Company or any of Sellerits Subsidiaries (except in each case the net share settlement or issuance of equity interests in respect of Company Equity Awards outstanding as of the date of this Agreement in accordance with their terms (or, with respect to net share settlement, consistent with past practice) and, as applicable, the Stock Plans as in effect on the date of this Agreement);
(iii) (A) authorizeacquire or agree to acquire any Equity Interest in, issueor make any investments in, sell or transfer any membership interests or other securities of SellerPerson, (B) adjust, split, combine make any loans or reclassify advances to any Person or otherwise amend make any capital contributions to any Person (other than as between the terms Company and its Subsidiaries and advances of any membership interest or other security expenses to employees in the ordinary course of Seller, (C) declare, authorize, set aside make or pay any dividend or other distribution (whether in cash, stock or other property) or (D) enter into any agreement business consistent with respect to the voting of any equity of Sellerpast practice);
(iv) (A) merge or consolidate the Company or any of its Subsidiaries with any other Person, acquire any business or assets of any other Person (whether by mergerother than with any Affiliate of the Company or any of its Subsidiaries), stock purchaseor adopt a plan of complete or partial liquidation, asset purchase dissolution, restructuring, recapitalization or other business combination), other than reorganization of the purchase Company or any of supplies in its Subsidiaries or establish any Person that would constitute a Subsidiary or Affiliate of the Ordinary Course of Business or (B) form any new SubsidiaryCompany;
(v) (A) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (including with respect to the Company, for the avoidance of doubt, Shares), except for (x) dividends paid by any Subsidiary of the Company to the Company or to any other Subsidiary of the Company and (y) regular quarterly or monthly dividends (as applicable) declared and paid with respect to the Shares and/or Preferred Shares made in the ordinary course of business consistent with past practice; or (B) split, combine or reclassify any of its capital stock or other equity interests or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or other equity interests (except in each case the issuance of equity interests in respect of Company Equity Awards outstanding as of the date of this Agreement in accordance with their terms and, as applicable, the Stock Plans as in effect on the date of this Agreement);
(vi) except as required pursuant to the terms of any Benefit Plan or as otherwise required by applicable Law, the Company shall not: (A) grant any new long-term incentive or equity-based awards, or amend, modify or waive the terms or conditions of any such outstanding awards under any Benefit Plan; (B) grant any transaction-related retention bonuses (it being understood the Company may pay a portion of the annual bonus in respect of the 2019 calendar year in the form of cash retention awards consistent with past practice); (C) increase the compensation payable to any employee, except for (i) employees who are not executive officers of the Company and (ii) increases implemented in the ordinary course of business consistent with past practice provided that the aggregate base salaries payable to all such employees does not exceed 103% of the previous year’s base salaries payable to all such employees; (D)
(i) terminate the employment of any executive officer (other than for cause), (ii) hire any new employee (except for new employees with an annual salary or wage rate of less than $100,000 annually and who are replacement hires receiving substantially similar terms of employment) or (iii) promote or grant merit increases to any employees, except in the ordinary course of business in connection with the Company’s annual or quarterly compensation review cycle or as the result of the termination or resignation of any employee; (E) adopt, enter into, terminate or amend any Benefit Plan or program that would be a Benefit Plan if adopted or any collective bargaining agreement or other Contract with any labor organization or other representative of the Company’s or any Company Subsidiary’s employees or make any contribution to any Benefit Plan, other than contributions required by Law or the terms of such Benefit Plans as in effect on the date hereof, except with respect to Benefit Plans providing for health and welfare benefits, the Company may (i) negotiate and enter into new contracts and extensions of existing contracts with Benefit Plan providers in the ordinary course of business consistent with past practice, provided that duration of such contracts or extensions do not extend beyond calendar year 2020 and (ii) take such other actions so long as the aggregate cost of any such Benefit Plan is not materially increased; (F) enter into or amend any employment, services, change in control, severance, deferred compensation, retention or similar Contract with any officer, director, or employee of the Company; (G) take any action to accelerate or otherwise change the operation payment timing of any compensation or benefit under any Benefit Plan; or (H) change any actuarial or other assumption used to calculate funding obligations with respect to any Benefit Plan or change the Business, Assets manner in which contributions are made or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operationbasis on which contributions are calculated, except such changes as may be required by GAAP;
(vii) make, change or revoke any material Tax election, change any Tax accounting method or period, file any amended Tax Return, enter into any closing agreement with respect to comply Taxes, request any Tax ruling, waive or extend the statute of limitations in respect of a material amount of Taxes or settle or compromise any material Tax liability or refund;
(viii) other than the sale of obsolete equipment or assets in the ordinary course of business, sell, lease, license or otherwise dispose of (whether by way of merger, consolidation, sale of stock or assets, or otherwise), grant an Encumbrance on or permit an Encumbrance to exist on, or agree to sell, lease, license, or otherwise dispose of, or grant or permit an Encumbrance on, any properties or assets of the Company or any of its Subsidiaries, in each case, other than any Permitted Encumbrances and other than with respect to any assets with a value of less than $500,000 individually or $2,000,000 in the aggregate;
(ix) acquire or agree to acquire all or a substantial portion of the assets or business of any Person or any division or line of business thereof;
(x) commence any Action or file any petition in any court relating to the bankruptcy, reorganization, insolvency, dissolution, liquidation or relief from debtors, in any case, in respect of the Company or any of its Subsidiaries;
(xi) amend, modify, waive or terminate, in each case, any existing Material Contract or enter into any Contract that would be a Material Contract if in effect on the date of this Agreement other than in each case (A) any termination or renewal for one year or less in accordance with the terms of any existing Material Contract on substantially similar terms, (B) the entry into new Material Contracts in replacement of existing Material Contracts on terms not materially worse to the Company or the relevant Subsidiary, in the aggregate, than the current terms and (C) immaterial ministerial amendments, modifications or waivers of the terms of Material Contracts in the ordinary course (it being understood that this provision shall not apply to any employment, services, change in control, severance, deferred compensation, retention or similar Contract with any Law officer, director, or employee of the Company, which shall be governed by clause (vi) above);
(xii) incur, redeem or prepay any Indebtedness (including the issuance of any debt securities, warrants or other rights to acquire any debt security), except for (A) Indebtedness for borrowed money incurred in the ordinary course of business not to exceed $2,000,000 in the aggregate, (B) Indebtedness in replacement of existing Indebtedness for borrowed money on terms substantially consistent with or more favorable to the Company than the Indebtedness being replaced, or (C) guarantees of Indebtedness of its wholly owned Subsidiaries otherwise incurred in compliance with this clause (xii);
(xiii) make any material change in business operations as defined in FINRA (NASD) Rule 1011(k);
(A) change its fiscal year or (B) make any material change in accounting methods, principles or practices used by it, except in each case as may be required (x) by GAAP or (y) by applicable Law, including Regulation S-X under the Securities Act;
(xv) other than in accordance with the Company’s capital expenditures budget for calendar year 2019 or any capital expenditures budget for calendar year 2020 (which budget shall not materially exceed the aggregate amount of capital expenditures provided in the capital expenditures budget for calendar year 2020), make any capital expenditure or expenditures, or incur any obligations or liabilities in connection therewith, which, individually, is in excess of $500,000 or, in the aggregate, are in excess of $2,000,000;
(xvi) settle or compromise any Action, other than settlements or compromises of claims that exclusively require the payment of money by the Company or its Subsidiaries of unreimbursed out-of-pocket settlement amounts that are (A) accrued or reserved for as of the date of this Agreement or (B) not in excess of $250,000 per Action or $2,000,000 in the aggregate for all Actions pursuant to this clause (B), or enter into any consent, decree, injunction or similar restraint or form of equitable relief or deferred prosecution agreement or similar agreement with any Government Authority that would impose any conduct conditions or remedies that would have a new line restrictive impact on the business of business the Company or abandon any of its Subsidiaries, or discontinue an existing line would reasonably be expected to impede or delay in any material respect the consummation of businessthe transactions contemplated by this Agreement, including obtaining the Company Shareholder Approval;
(vixvii) make cancel, compromise, waive or release any loansmaterial right or claim of the Company and its Subsidiaries;
(xviii) cancel, advances terminate or capital contributions tomodify in any material respect, or investments intake any action that could permit cancellation, termination or material modification of, any Person Insurance Policy (other than advances the renewal of expenses to Business Employees any Insurance Policy in place as of the date hereof in the Ordinary Course ordinary course of Businessbusiness consistent with past practice);
(viixix) enter into any real property lease or modify, amend, renew, extend, waive or exercise any material right or remedy under or terminate any Lease, other than (A) institute any renewal for one year or announce any increase in the compensation, bonuses or other benefits payable to any Business Employeesless, (B) enter intoimmaterial ministerial amendments, amend modifications or waive any rights under any employmentwaivers, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on or otherwise encumber any Assets, other than in the Ordinary Course of Business;
(ix) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any each case of the foregoing (A) through and (B), of any Lease in existence on the date hereof in the ordinary course of business consistent with past practice or (C)) with respect to any Lease that requires a monthly rent payment of less than $3,000;
(xixx) incur other than ordinary course director compensation, ordinary course compensation and employee benefit entitlements, ordinary course reimbursement of travel and entertainment expenses or advances regarding the same, in each case that are payable in the ordinary course of business consistent with past practice or as otherwise permitted pursuant to Section 7.1(a)(vi), enter into any Indebtedness transaction or issue arrangement with any debt securities (A) director, officer or warrants employee of the Company, (B) Person who is or other rights was, since the Applicable Date, a greater than 5% shareholder of the Company or (C) any of their respective Affiliates;
(xxi) (A) acquire or agree to acquire debt securities any Equity Interests in, assets or accounts of, or make any investments in, any Financial Advisor or prospective Financial Advisor (including, for this purpose, any Person affiliated with any such Financial Advisors) in excess of Seller $500,000 individually or assume$5,000,000, guarantee in the aggregate or endorse(B) make any recruiting loans or similar advances (including advances of expenses) to any prospective Financial Advisor in excess of $500,000 individually or $2,500,000 in the aggregate; provided, as an accommodation however, that if the Closing does not occur on or otherwiseprior to March 31, 2020, the obligations aggregate limit set forth in sub-clause (A) shall increase to $10,000,000 and the aggregate limit set forth in sub-clause (B) shall increase to $5,000,000;
(A) make any change to the Financial Advisor “payout grids” or substantially similar compensation table (as in effect as of the date hereof) or (B) make any change to any other methodology affecting the rate of any Person for Indebtedness or capital obligationsother compensation with respect to the Financial Advisors, in each case, where such changes would be applicable to the Financial Advisor field force taken as a whole; provided that, in the case of (A) or (B), the Company or its Subsidiaries may make changes to the compensation payable to individual Financial Advisors on a case-by-case basis consistent with past practices; or
(xxiii) affirmatively authorize, agree or commit, or publicly announce an intention, to do any of the foregoingactions prohibited by this Section 7.1(a).
(b) Notwithstanding anything to the contrary in Section 7.1(a), or any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall be prevented from undertaking, be required to obtain Parent’s consent in relation to, or incur any Liability as a result of effecting any of the following:
(i) any matter required by Law, required by any Government Authority or requested by any Government Authority as part of its supervision of the Company or any of its Subsidiaries;
(xiiii) cancel the implementation of any debts owed to transaction or claims held by Seller in excess the taking of $35,000;
(xiii) abandonany action required by, disclaimor otherwise permitted under, dedicate to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP this Agreement;
(xiviii) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with matter disclosed in the SellerCompany Disclosure Letter;
(xviv) revalue the performance of an obligation under any Contract existing as at the date hereof;
(v) any action by the Company or any Subsidiary thereof for, on behalf or at the direction of any Client or customer of the Company or any Subsidiary thereof (including investments in securities for or on behalf of customers or Clients), provided that such action is taken in the ordinary course of business consistent with past practice;
(vi) the release or discharge of any Liability owed by any Subsidiary of the Company to the Company or any of the assets of the Seller, except as required by GAAPits Affiliates, or enter into, owed by the Company to any of its Subsidiaries or Affiliates; or
(vii) any action taken in connection with disaster recovery or related emergency response efforts with the intention of minimizing any adverse effect resulting from such efforts (provided that the Company shall promptly notify Parent of any such efforts).
(c) Neither Party shall knowingly take or permit any of their Affiliates to take any action that would reasonably be expected to prevent, materially delay or materially impede the assets consummation of the Seller to become bound Merger or the other transactions contemplated by any Contract that is or would constitute a Material Contract;
(xvi) (A) change any method of accounting or accounting practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Business;
(xvii) make, revoke or change any Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date;
(xviii) modify, amend or terminate (other than pursuant to the expiration of its term other than as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunder;
(xix) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property;
(xx) commence, settle or compromise any Proceeding;
(xxi) cancel, materially reduce or fail to maintain any insurance policy;
(xxii) change or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;
(xxiii) engage in any transaction with any Related Parties; or
(xxiv) authorize or enter into any agreement, commitment or understanding (whether written or oral) with respect to the foregoingthis Agreement.
Appears in 1 contract
Sources: Merger Agreement (Ladenburg Thalmann Financial Services Inc.)
Interim Operations. (a) From the date hereof until the earlier of the Closing or termination of this AgreementAcceptance Time, Seller shall (i) operate the Business only in the Ordinary Course of Business, including maintaining appropriate service levels, and in compliance with applicable Law including any COVID-19 Measures; and (ii) use commercially reasonable efforts to except (A) maintain and preserve intact the business organization and goodwill of the Business, the Assets and the Assumed Liabilitiesas may be required by applicable Law, (B) maintain satisfactory relationships with Seller’s clientsthe prior written consent of Parent (which consent shall not unreasonably be withheld, operators, distributors, customers, insurance underwriters and other third parties having business dealings with Sellerconditioned or delayed), (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay as expressly contemplated by this Agreement, or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services of, the Business Employees.
(b) Without limiting the generality of the foregoing, except as set forth in Section 5.1(b5.1(a) of the Company Disclosure Schedule, as expressly permitted by this Agreement or as approved in writing by ▇▇▇▇▇, from (x) the date hereof until Company shall cause the earlier business of the Closing or Company and its Subsidiary to be conducted in the termination ordinary course consistent with past practice and, to the extent consistent therewith, the Company shall use reasonable best efforts to (i) preserve intact its and its Subsidiary’s present business organization and maintain the current relationships with Governmental Entities and other Persons having business dealings with the Company and its Subsidiary, (ii) prepare and file any requisite regulatory filings with any Regulatory Authority on a timely basis and consistent with their respective past practices and (iii) obtain and maintain quantities of this Agreementeach finished Company Pharmaceutical Product and related raw materials and components that the Company reasonably expects to be required for use in the ongoing and anticipated phase 2 and phase 3 clinical trials of each Company Pharmaceutical Product and (y) without limiting the generality of clause (x) above and in furtherance thereof, Seller the Company shall not take any action which would require disclosure on Section 2.8 of the Disclosure Schedule orand shall not permit its Subsidiary to:
(i) take amend its certificate of incorporation, bylaws or omit to take any action that results or may reasonably be expected to result in any of the representations and warranties of Seller or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfiedcomparable governing documents;
(ii) amend merge or otherwise change consolidate the organizational documents of SellerCompany or its Subsidiary with any other Person, except for such transactions between the Company and its Subsidiary, or dissolve or completely or partially liquidate;
(iii) form any Subsidiary or acquire assets from any other Person with a value or purchase price in the aggregate in excess of $300,000 in any transaction or series of related transactions, other than acquisitions in the ordinary course of business consistent with past practice with a value or purchase price in the aggregate not in excess of $300,000 or pursuant to Material Contracts in effect as of the date hereof;
(iv) issue, sell, pledge, dispose of, grant, transfer or encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer or encumbrance of, any shares of capital stock of the Company or its Subsidiary, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, other than (A) authorize, issue, sell issuance or transfer any membership interests sales of Shares upon exercise of the Company Options or other securities the vesting of Seller, Company Restricted Stock or (B) adjustas permitted under Section 5.1(a)(xviii);
(v) other than in the ordinary course of business consistent with past practice, split, combine create or reclassify incur any Lien on (i) any assets (other than Company Intellectual Property) of the Company or otherwise amend the terms its Subsidiary having a value in excess of any membership interest or other security of Seller$300,000, (Cii) any material Intellectual Property of the Company or its Subsidiary, or (iii) material Intellectual Property licensed to the Company or its Subsidiary;
(vi) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than the Company or its Subsidiary) in excess of $300,000 in the aggregate;
(vii) (A) declare, authorizeaccrue, set aside aside, make or pay any dividend or other distribution (whether payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for dividends paid by the Company’s Subsidiary to the Company), (B) repurchase, redeem or otherwise reacquire any shares of capital stock or other property) securities, or subdivide, reclassify, recapitalize, split, combine or exchange or enter into any similar transaction with respect to any of its capital stock or other securities or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or other securities, except for any split, combination or reclassification of capital stock of a wholly owned Subsidiary of the Company, or any issuance or authorization or proposal to issue or authorize any securities of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company, or (DC) enter into any agreement with respect to the voting of any equity of Seller;
(iv) (A) merge or consolidate with any other Person, acquire any business or assets of any other Person (whether by merger, stock purchase, asset purchase or other business combination), other than the purchase of supplies in the Ordinary Course of Business or (B) form any new Subsidiary;
(v) (A) materially change the operation of the Business, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of business;
(vi) make any loans, advances or its capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of Business);
(vii) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause)stock;
(viii) transfer, lease, licenseincur any indebtedness for borrowed money or assume, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on endorse or otherwise encumber any Assetsbecome liable or responsible for (whether directly, other than in the Ordinary Course of Business;
(ix) acquire any real property contingently or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become due, or (Dotherwise) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur any Indebtedness Person’s indebtedness for borrowed money, or issue or sell any debt securities or warrants or other rights to acquire any debt securities security of Seller the Company or assumeits Subsidiary, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person except for Indebtedness or capital obligations, indebtedness for borrowed money incurred in the case ordinary course of business consistent with past practice not to exceed $300,000 in the aggregate;
(ix) except as contemplated in capital budgets furnished to Parent prior to the date of this Agreement, make any capital expenditures in excess of $300,000 in the foregoingaggregate;
(x) make any changes with respect to accounting policies or procedures other than as required by changes in GAAP;
(xi) settle any litigation for an amount in excess of $300,000;
(xii) cancel other than as reasonably necessary to facilitate the research and/or clinical operations of the Company in a manner consistent with the Company’s operating budgets furnished to Parent prior to the date of this Agreement, enter into any debts owed Contract that would have been a Material Contract had it been entered into prior to or claims held by Seller in excess of $35,000this Agreement;
(xiii) abandon, disclaim, dedicate other than as reasonably necessary to facilitate the research and/or clinical operations of the Company in a manner consistent with the Company’s operating budgets furnished to Parent prior to the publicdate of this Agreement, sellamend, assign modify or grant terminate any security interest in, to or under any Business Intellectual Property or Business IP AgreementMaterial Contract;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to Contracts in effect prior to the date hereof, transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any material assets, licenses, operations, rights or businesses of the Company or its Subsidiary, except for (A) sales, transfers or dispositions of obsolete or worthless assets or (B) sales, transfers, leases, licenses or other dispositions of assets with a written agreement with fair market value not in excess of $300,000 in the Selleraggregate;
(xv) revalue assign or grant an exclusive license of any material right in any Company Intellectual Property necessary or useful for the manufacture, use, sale, offer for sale or importation of any Company Pharmaceutical Products or that otherwise enables a third party to compete with the assets Company with respect to the manufacture or sale of the Seller, except as required by GAAP, or enter into, or permit any of the assets of the Seller to become bound by product that competes with any Contract that is or would constitute a Material ContractCompany Pharmaceutical Product;
(xvi) waive any inbound license in any IP Contract under any Patent or other Company Intellectual Property material to any Company Pharmaceutical Product and, other than in the ordinary course of business consistent with past practice, (A) amend any inbound license in any IP Contract under any Patent or other Company Intellectual Property material to any Company Pharmaceutical Product or (B) enter into any Contract that would constitute an IP Contract if entered into prior to the date of this Agreement;
(xvii) except as contemplated in operating budgets furnished to Parent prior to the date of this Agreement, commence (other than planning) or alter, in a manner that would materially increase the expenditures to be made by the Company in connection therewith, any new Phase I, Phase II, Phase III or Phase IV human clinical trial (including initiation of a new institutional review board) involving any Company Pharmaceutical Product;
(xviii) except as required by applicable Law or otherwise required pursuant to existing Contracts or Benefit Plans in effect as of the date hereof and made available to Parent, (A) increase the salaries or wages of any Employee, except in the ordinary course of business consistent with past practice, (B) promote any Employee except in order to fill a position vacated after the date of this Agreement, (C) pay any bonus to any Employee other than a bonus pursuant to Section 5.8(f), (D) enter into or establish any new employment agreement or change in control severance agreement with any method of accounting or accounting practiceEmployee, other than changes with any new Employee hired to replace an Employee who is party to any such agreement, (E) make any severance payments to any Employee in excess of what they are contractually entitled to, (F) make any new equity awards to any Employee or accelerate the vesting under any equity compensation plan (except for vesting accelerated pursuant to Section 3.3 of this Agreement), (G) other than in accordance with Section 5.1(a)(xviii)(D), establish, adopt, terminate or materially amend any Benefit Plan, (H) hire any employee at the level of Vice President or above, (I) hire any employee in a sales, general or administrative capacity with an annual base salary in excess of $150,000, or (J) hire any employee (other than an employee described in clause “(I)” above) with an annual base salary in excess of $250,000;
(xix) except as required under by applicable Law Law, make, change or GAAP rescind any material Tax election, file any amended material Tax Return, settle or compromise any material Tax liability, agree to an extension or waiver of the statute of limitations with respect to material Taxes, enter into any closing agreement with respect to a material Tax, surrender any right to claim a material Tax refund, or change any material method of Tax accounting;
(xx) enter into or consummate any tax planning or restructuring transaction which involves any transfer, assignment or other disposition of any Company Intellectual Property;
(xxi) (A) waive or amend (except in the course of diligently prosecuting the Company Intellectual Property) the Company’s rights in or to any Company Intellectual Property owned by the Company or its Subsidiary that is registered or the subject of an application for registration, (B) fail to diligently prosecute or maintain any material Company Intellectual Property owned by the Seller’s booksCompany or its Subsidiary that is registered or the subject of an application for registration, accounts and records in each case in the Ordinary Course name of Business;
Company or its Subsidiary or (xvii) make, revoke or change any Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date;
(xviii) modify, amend or terminate (other than pursuant to the expiration of its term other than as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunder;
(xixC) fail to pay make any required maintenance or other similar fees or otherwise fail payments in accordance with the terms of any IP Contract pursuant to make required filings or payments required to maintain and further prosecute which the Company licenses any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned material Intellectual Property;
(xx) commence, settle or compromise any Proceeding;
(xxi) cancel, materially reduce or fail to maintain any insurance policy;
(xxii) change or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration qualify any new site for manufacturing of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;Company Pharmaceutical Product; or
(xxiii) engage in any transaction with any Related Parties; or
(xxiv) authorize or enter into any agreementContract to do any of the foregoing.
(b) Each of Parent and Merger Sub, commitment subject to the limitations set forth in Section 5.4(e)(ii), on the one hand, and the Company, on the other hand, agrees that, except as otherwise provided in this Agreement, it shall not knowingly take any action that would reasonably be expected to prevent or understanding delay the consummation of the Offer, the Merger and the other Transactions in accordance with the terms of this Agreement. Without limiting the generality of the foregoing, each of Parent and Merger Sub agrees that, after the date hereof and prior to the Effective Time, it shall not consummate or agree to consummate any purchase or other acquisition of any assets, licenses, operations, rights or businesses that, individually or in the aggregate with any other such purchase or acquisition, would reasonably be expected to (whether i) prevent or delay the parties hereto from obtaining any consents, registrations, approvals, permits or authorizations required to be obtained from any Governmental Entity in connection with the consummation of the Offer, the Merger and the other Transactions, (ii) result in the imposition of a condition or conditions on any such consents, registrations, approvals, permits or authorizations, or (iii) otherwise prevent or delay any party hereto from performing its obligations hereunder or consummating the Offer, the Merger and the other Transactions.
(c) The Company shall promptly notify Parent and Merger Sub of any significant data relating to the Key Product, including information related to any significant adverse events with respect to the Key Product.
(d) Each party hereto shall promptly advise the other parties hereto of any Proceeding or material claim threatened, commenced or asserted against or with respect to any such party relating to the Transactions and promptly provide the parties hereto with copies of all material complaints, pleadings and filings related thereto.
(e) From the date hereof until the Acceptance Time, the Company shall (i) consult with Parent in connection with any proposed meeting with the FDA or any other Governmental Entity relating to any Company Pharmaceutical Product, (ii) promptly inform Parent of, and provide Parent with a reasonable opportunity to review, any material filing proposed to be made by or on behalf of any of the Company or its Subsidiary, and any material correspondence or other material communication proposed to be submitted or otherwise transmitted to the FDA or any other Governmental Entity by or on behalf of any of the Company or its Subsidiary, in each case relating to any Company Pharmaceutical Product, (iii) keep Parent promptly informed of (A) any communication (written or oral) with respect or from the FDA and any other Governmental Entity and (B) any material communications (written or oral) received from any Person relating to the foregoingCompany Intellectual Property and (iv) promptly inform Parent and provide Parent or Merger Sub with a reasonable opportunity (but no more than three (3) Business Days) to comment, in each case, prior to making any material change to any study protocol, adding any new trial, making any material change to a manufacturing plan or process, making any material change to a development timeline or initiating, or making any material change to, promotional or marketing materials or activities relating to any Company Pharmaceutical Product.
(f) Notwithstanding the above, the delivery of any notice pursuant to Section 5.1(b), 5.1(c), 5.1(d) or 5.1(e) shall not limit or otherwise affect the representations, warranties, covenants or agreements of the parties hereto, the remedies available hereunder to the party hereto receiving such notice or the conditions to such party’s obligation to consummate the Offer, the Merger or any of the other Transactions.
(g) Nothing contained in this Agreement shall give Parent or Merger Sub, directly or indirectly, the right to control the Company or its Subsidiary or direct the business or operations of the Company or its Subsidiary prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its operations and the operations of its Subsidiary. Nothing in this Agreement, including any of the actions, rights or restrictions set forth herein, shall be interpreted in such a way as to place the Company, Parent or Merger Sub in violation of any rule, regulation or policy of any Governmental Entity, including any applicable Law.
Appears in 1 contract
Sources: Merger Agreement (Pharmasset Inc)
Interim Operations. (a) From the date hereof and until the Effective Time or earlier of the Closing or termination of this Agreement, Seller except (w) as set forth in Section 6.1(a) of the Company Disclosure Letter, (x) as otherwise expressly contemplated or expressly permitted or required by this Agreement, (y) to the extent consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned) or (iz) operate as required by applicable Law, the Business only Company shall, and shall cause its Subsidiaries to, cause the business of it and its Subsidiaries to be conducted in the Ordinary Course of Business, including maintaining appropriate service levelsordinary course, and in compliance with applicable Law including any COVID-19 Measures; the Company shall use reasonable best efforts to, and (ii) shall cause each of its Subsidiaries to use commercially reasonable best efforts to (A) to, preserve its business organizations intact and maintain and preserve intact the business organization existing relations and goodwill of the Business, the Assets and the Assumed Liabilities, (B) maintain satisfactory relationships with Seller’s clients, operators, distributorsGovernmental Entities, customers, insurance underwriters suppliers, employees and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services of, the Business Employees.
(b) Without limiting associates. Notwithstanding the generality of the foregoing, except as and subject to the exceptions set forth in Section 5.1(bclauses (w), (x), (y) and (z) of the immediately preceding sentence, the Company shall not, and shall cause its Subsidiaries not to:
(i) amend the certificate of incorporation, bylaws or comparable governing documents of the Company or any of its Subsidiaries;
(ii) issue, sell, pledge, dispose of, grant, transfer or otherwise encumber any shares of capital stock, voting securities, partnership interest, membership interest or similar interest or any option, warrant, right or security convertible, exchangeable or exercisable therefor or other instrument or right the value of which is based on any of the foregoing (collectively, “Equity Interests”) of the Company or any of its Subsidiaries (including any Company Equity Awards), other than (A) issuance of Shares pursuant to Company Stock Options outstanding on the date hereof under the Company Plans in accordance with the terms thereof, and (B) issuances of Shares in connection with the matching of contributions under the (1) Dynegy Midwest Generation, Inc. 401(k) Savings Plan for Employees Covered under a Collective Bargaining Agreement (As Amended and Restated Effective January 1, 2009); (2) Dynegy Midwest Generation, Inc. 401(k) Savings Plan (As Amended and Restated Effective January 1, 2009); (3) Dynegy Inc. 401(k) Savings Plan (As Amended and Restated Effective January 1, 2009); and (4) Dynegy Northeast Generation, Inc. Savings Incentive Plan (As Amended and Restated Effective January 1, 2009), in each case in accordance with the terms thereof;
(iii) split, combine, subdivide or reclassify any of its Equity Interests;
(iv) declare, set aside, establish a record date for, or pay any dividends on or make any other distributions (whether payable in cash, stock, property or a combination thereof) in respect of any of its Equity Interests, other than any dividends from any wholly owned Subsidiary of the Company to the Company or to another such Subsidiary of the Company;
(v) repurchase, redeem or otherwise acquire any of its Equity Interests, except for (A) mandatory sinking fund obligations existing on the date hereof and disclosed in Section 6.1(a)(v) of the Company Disclosure ScheduleLetter and (B) redemptions, purchases or acquisitions pursuant to the exercise or settlement of Company Stock Options, employee severance, retention, termination, change of control and other contractual rights existing on the date hereof on the terms in effect on the date hereof, including with respect to Company Restricted Stock;
(vi) incur, issue, or modify in any material respect the terms of, any Indebtedness, or assume, prepay, defease, cancel, acquire, guarantee or endorse, or otherwise become responsible for (whether directly or indirectly, contingently or otherwise), the indebtedness of any Person, except for (A) advances of credit incurred under the Company’s existing credit facilities in an aggregate amount not to exceed $2,500,000, (B) letters of credit issued under the Credit Agreement (x) in the ordinary course of business consistent with past practices for non-trading activities but in any event in an aggregate amount not to exceed $25,000,000 or (y) in connection with the sale or purchase of Derivative Products, physical electricity products, or fuel commodities for the Company’s assets in accordance with Section 6.1(a)(xix) of the Company Disclosure Letter, (C) letters of credit issued under the Credit Agreement to support positions in place as expressly permitted by of the date of this Agreement or (D) Indebtedness owed by any wholly owned Subsidiary of the Company to the Company or any other wholly owned Subsidiary of the Company;
(vii) grant or incur any Lien, other than (A) Permitted Liens, (B) Liens for current Taxes, assessments or other charges of a Governmental Entity not yet due and payable or which is being contested in good faith through appropriate proceedings, (C) pledges or deposits by the Company or any of its Subsidiaries in the ordinary course of business under workmen’s compensation Laws, unemployment insurance Laws or similar legislation, (D) good faith deposits in connection with Contracts (other than for the payment of Indebtedness) or leases to which the Company or one of its Subsidiaries is a party, in each case, in the ordinary course of business consistent with past practice, (E) deposits to secure public or statutory obligations of the Company or one of its Subsidiaries, or to secure surety or appeal bonds to which such entity is a party, or deposits as approved security for contested Taxes, in writing each case incurred or made in the ordinary course of business consistent with past practice, (F) licenses granted to third parties in the ordinary course of business consistent with past practice by the Company or its Subsidiaries, (G) Liens permitted under the outstanding Indebtedness of the Company and its Subsidiaries as of the date hereof, (H) Liens granted in connection with any Indebtedness permitted under Section 6.1(a)(vi), and (I) Liens granted or incurred in connection with the sale or purchase of Derivative Products, physical electricity products, or fuel commodities for the Company’s assets in accordance with Section 6.1(a)(xix) of the Company Disclosure Letter or to support positions in place as of the date of this Agreement;
(viii) (A) except (1) to the extent required by applicable Law or (2) to the extent required by written agreements existing on the date of this Agreement that have been disclosed or made available to Parent prior to the date hereof, grant or announce any stock option, equity or incentive awards or increase in the salaries, bonuses or other compensation and benefits payable by the Company or any of its Subsidiaries to any of the employees, officers, directors or other independent contractors who provide services in an individual capacity of the Company or any of its Subsidiaries, (B) except to the extent required by written agreements existing on the date of this Agreement that have been disclosed or made available to Parent, pay or agree to pay any pension, retirement allowance, termination or severance pay, bonus or other employee benefit not required by any existing Company Plan to any employee, officer, director or other independent contractors who provide services in an individual capacity of the Company or any of its Subsidiaries, whether past or present, or take any action to accelerate vesting of any right to compensation or benefits, (C) except to the extent required by written agreements existing on the date of this Agreement that have been disclosed or made available to Parent, enter into or amend any Contracts of employment or any consulting, bonus, severance, retention, retirement or similar agreement, (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP, (E) change the accrual rate for the Company’s short-term incentive plans used to prepare the Company’s financial statements, (F) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries, or (G) except as required to ensure that any Company Plan is not then out of compliance with applicable Law, enter into or adopt any new or renew, amend or terminate any existing Company Plan or benefit arrangement if such adoption, renewal, amendment or termination would result in a material cost to the Company or any of its Subsidiaries;
(ix) (A) hire any employee or individual independent contractor with total expected annual base salary, including commissions, in excess of $100,000, other than to fill vacancies arising in the ordinary course of business at annual base salary levels not in excess of 120% of prevailing market rates or (B) subject to Section 6.9(f), terminate the employment of any Company Employee who participates in the Dynegy Inc. Executive Change in Control Severance Pay Plan (Effective April 3, 2008), except for “cause” thereunder or otherwise take any action that could reasonably result in the closure of the Company’s regional headquarters in California;
(x) other than in the ordinary course of business and consistent with past practice, (A) make or change any material Tax election, or change the Company’s or such Subsidiary of the Company’s method of accounting for Tax purposes, (B) file any amended Tax Return involving a material amount of additional Taxes, (C) settle or compromise any material Tax liability, or any claim for a material refund of Taxes or enter into any closing agreement with respect to any material amount of Tax, or (D) agree to an extension or waiver of the statute of limitations applicable to the assessment or collection of any material Taxes except, in each case, as required by applicable Law;
(xi) except as required by GAAP, the SEC or applicable Law, change any material accounting policies or principles;
(xii) (A) enter into or assume any Contract that would have been a Company Material Contract had it been entered into prior to the date hereof, (B) terminate, materially amend or waive any material rights under any Company Material Contract or any Contract that would have been a Company Material Contract had it been entered into prior to the date hereof excluding any termination upon expiration of a term in accordance with the terms of such Company Material Contract or (C) or waive any material default under, or release, settle or compromise any material claim against the Company or liability or obligation owing to the Company under any Company Material Contract; provided in each case that the Company or any of its Subsidiaries shall be permitted to renew or replace any Company Material Contract with one or more Contracts on substantially similar terms;
(xiii) subject to Section 6.16, waive, release, settle or compromise any pending or threatened action, litigation, claim or arbitration or other proceedings before a Governmental Entity if such waiver, release, settlement or compromise by the Company or any of its Subsidiaries (A) is for an amount in excess of $2,500,000 individually or $5,000,000 in the aggregate, or (B) would entail the incurrence of (1) any obligation or liability of the Company in excess of such amount, including costs or revenue reductions, (2) obligations that would impose any material restrictions on the business or operations of the Company or its Subsidiaries;
(xiv) acquire (including by merger, consolidation, or acquisition of stock or assets) any interest in any Person or any division thereof or any assets thereof, excluding acquisitions of supplies, parts, fuel, materials and other inventory in the ordinary course of business consistent with past practice, or make any loan, advance or capital contribution to, or investment in, any Person or any division thereof, other than (A) any such acquisitions, loans, advances, contributions or investments that are for consideration not in excess of $1,000,000 individually or $5,000,000 for all such transactions by the Company and its Subsidiaries in the aggregate or (B) loans, advances or capital contributions to or among the Company and wholly owned Subsidiaries of the Company;
(xv) sell, transfer, lease, license, assign, allow to lapse or otherwise dispose of (including, by merger, consolidation, or sale of stock or assets) any entity, business, assets, rights or properties of the Company or any of its Subsidiaries having a current value in excess of $1,000,000 individually, or $5,000,000 for all such transactions by the Company and its Subsidiaries in the aggregate other than (A) sales, transfers, leases, licenses assignments and other dispositions of inventory, electricity or, subject to Section 6.6(b), other commodities or Derivative Products in the ordinary course of business consistent with past practice, (B) dispositions of obsolete or worthless assets or properties in the ordinary course of business consistent with past practice or (C) transactions solely among the Company and/or any of its Subsidiaries;
(xvi) authorize or make any capital expenditure, other than (A) any capital expenditure contemplated by the Company’s business plan set forth on Section 6.1(a)(xvi) of the Company Disclosure Letter, (B) capital expenditures that are not, in the aggregate, in excess of $5,000,000 above the capital expenditures provided for in such business plan or (C) capital expenditures required by Law or in response to a casualty loss or property damage;
(xvii) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(xviii) merge or consolidate the Company or any of its Subsidiaries with and into any other Person;
(xix) (A) modify in any material respect the Commodity Risk Policy, the Company Trading Guidelines or any similar policy, other than modifications that are more restrictive to the Company and its Subsidiaries, or (B) the sale or purchase of Derivative Products, physical electricity products, or fuel commodities for the Company’s assets that are not in accordance with Section 6.1(a)(xix) of the Company Disclosure Letter;
(xx) enter into, with respect or related to Dynegy ▇▇▇▇▇▇ Landing, from LLC, Dynegy Morro Bay, LLC, Dynegy Oakland, LLC and Casco Bay Energy Company, LLC, any energy, ancillary services, fuel, emissions allowance, credit, or offset, transmission, transportation, or storage transactions with a term extending through the date hereof until later of (i) November 15, 2010, and (ii) the earlier end of the Closing prompt month, other than electric capacity sales in organized markets requiring mandatory bidding;
(xxi) fail to maintain in full force and effect material insurance policies covering the Company and its Subsidiaries and their respective properties, assets and businesses in a form and amount consistent with past practice unless the Company determines in its reasonable commercial judgment that the form or amount of such insurance should be modified;
(xxii) permit any letters of credit to be issued other than letters of credit issued under the termination of this AgreementCredit Agreement by JPMorgan Chase Bank, Seller shall not N.A., Citibank, N.A, Credit Suisse, Cayman Islands Branch and ABN AMRO BANK N.V;
(xxiii) subject to Section 6.2, take any action which would require disclosure on Section 2.8 of the Disclosure Schedule or:
(i) take or omit to take any action that results or may reasonably be expected to result in any of the representations and warranties of Seller or conditions to the Beneficial Owners Merger set forth herein in Article VII not being satisfied or becoming untrue in delaying the satisfaction of any material respect such conditions, or in any that would reasonably be expected to prevent, delay, impair or interfere with the ability of the conditions set forth herein not being satisfied;
(ii) amend or otherwise change Company to consummate the organizational documents of Seller;
(iii) (A) authorize, issue, sell or transfer any membership interests or other securities of Seller, (B) adjust, split, combine or reclassify or otherwise amend the terms of any membership interest or other security of Seller, (C) declare, authorize, set aside make or pay any dividend or other distribution (whether in cash, stock or other property) or (D) enter into any agreement with respect to the voting of any equity of Seller;
(iv) (A) merge or consolidate with any other Person, acquire any business or assets of any other Person (whether by merger, stock purchase, asset purchase or other business combination), other than the purchase of supplies in the Ordinary Course of Business or (B) form any new Subsidiary;
(v) (A) materially change the operation of the Business, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of business;
(vi) make any loans, advances or capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of Business);
(vii) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on or otherwise encumber any Assets, other than in the Ordinary Course of Business;
(ix) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur any Indebtedness or issue any debt securities or warrants or other rights to acquire debt securities of Seller or assume, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person for Indebtedness or capital obligations, in the case of any of the foregoing;
(xii) cancel any debts owed to or claims held by Seller in excess of $35,000;
(xiii) abandon, disclaim, dedicate to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreement;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;
(xv) revalue any of the assets of the Seller, except as required by GAAP, or enter into, or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contract;
(xvi) (A) change any method of accounting or accounting practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Business;
(xvii) make, revoke or change any Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date;
(xviii) modify, amend or terminate (other than pursuant to the expiration of its term other than as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunder;
(xix) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property;
(xx) commence, settle or compromise any Proceeding;
(xxi) cancel, materially reduce or fail to maintain any insurance policy;
(xxii) change or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;
(xxiii) engage in any transaction with any Related PartiesMerger; or
(xxiv) commit, authorize or agree to take any of the foregoing actions or enter into any agreement, commitment letter of intent (binding or understanding (whether written non binding) or oral) similar agreement or arrangement with respect to any of the foregoing actions.
(b) Neither Parent nor Merger Sub shall take or permit any of their Affiliates to take any action that is reasonably likely to prevent or delay the consummation of the Merger, the NRG Sale or the other transactions contemplated by this Agreement or the NRG PSA. In furtherance and not in limitation of the foregoing., Merger Sub shall, and Parent shall cause Merger Sub to, (x) not consent to any request by NRG for approval to take any action, or waive NRG’s or its Affiliates’ failure to perfo
Appears in 1 contract
Sources: Merger Agreement (Dynegy Inc.)
Interim Operations. (a) From the date hereof until of this Agreement through the earlier of the Closing End Date or the termination of this Agreement in accordance with its terms (provided that the restriction set forth in clause (v) of this Section 7.1(a) shall terminate on the Determination Date), except as otherwise contemplated by this Agreement, Seller required by Law or disclosed in Section 7.1 of the RGA Disclosure Schedule, without MetLife’s written consent (which consent shall not be unreasonably withheld or delayed if the action would not reasonably be expected to delay or impair the Transactions or the parties’ ability to comply with their obligations under this Agreement), RGA shall not, and shall cause its Subsidiaries not to:
(i) operate (A) except in connection with any shareholder rights plan (other than a Section 382 Shareholder Rights Plan) so long as the Business only consideration or adoption of any such other shareholder rights plan would not require the filing of a Current Report on Form 8-K or disclosure on the Form S-4 prior to the Determination Date to report consideration or adoption of such shareholder rights plan or (B) except in connection with a Section 382 Shareholder Rights Plan, amend or propose to amend its articles of incorporation or by-laws or equivalent organizational documents (other than the Ordinary Course Amended and Restated RGA Articles of BusinessIncorporation and the Amended and Restated RGA Bylaws, including maintaining appropriate service levels, and in compliance each case in accordance with applicable Law including the terms of this Agreement) in a manner that would adversely affect the rights of RGA Shareholders in any COVID-19 Measures; and material respect or that would reasonably be expected to delay or impair the Transactions or the parties’ ability to comply with their obligations under this Agreement;
(ii) use commercially reasonable efforts adopt a plan or agreement of complete or partial liquidation or dissolution, except that this clause (ii) of Section 7.1(a) shall not apply with regard to Subsidiaries of RGA that are not Significant Subsidiaries;
(Aiii) maintain change the principal business of RGA and preserve intact its Subsidiaries from the life reinsurance business organization and goodwill to a different line of business; A-29
(iv) enter into any line of business that is not reasonably related or complementary to the Businesslife reinsurance business;
(v) acquire, or enter into an agreement to acquire, any businesses, assets, product lines, business units, business operations, stock or other properties, including by way of merger or consolidation, where the Assets and the Assumed Liabilitiestotal consideration paid, or to be paid, by RGA in such acquisition is in excess of $500 million; or
(Bvi) maintain satisfactory relationships authorize any of, or commit to do or enter into any binding Contract with Seller’s clients, operators, distributors, customers, insurance underwriters and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject respect to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services any of, the Business Employeesforegoing actions in clauses (i) through (v) of this Section 7.1(a).
(b) Without limiting From the generality date of the foregoing, except as set forth in Section 5.1(b) of the Disclosure Schedule, as expressly permitted by this Agreement or as approved in writing by ▇▇▇▇▇, from the date hereof until through the earlier of the Closing End Date or the termination of this Agreement in accordance with its terms, except as otherwise contemplated by this Agreement, Seller required by Law or disclosed in Section 7.1 of the RGA Disclosure Schedule, without MetLife’s written consent (which consent shall not take be unreasonably withheld or delayed if the action would not reasonably be expected to delay or impair the Transactions or the parties’ ability to comply with their obligations under this Agreement), RGA shall not, and shall cause its Subsidiaries not to, do any of the following during the period in which the Offer is open, nor prior to the commencement of the Offer to the extent that such action which (including the completion of an announced transaction) would require disclosure the filing of a Current Report on Section 2.8 Form 8-K to report previously undisclosed information during the period in which the Offer is open (provided that these restrictions shall not apply to the completion of a transaction disclosed prior to the Disclosure Schedule or:Commencement Date so long as such completion occurs after the Acceptance Time):
(i) take except in connection with a Section 382 Shareholder Rights Plan, or, to the extent permitted by clause (i) of Section 7.1(a), any other shareholder rights plan, issue, sell or omit grant any shares of its capital stock, any other voting securities, or any other securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to take subscribe for any action shares of its capital stock, or any rights, warrants or options to purchase any shares of its capital stock, or any securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for, any shares of its capital stock; provided that results RGA may (subject to RGA’s indemnification obligations under Section 8.2(d)): (A) issue or may reasonably be expected grant any options, rights, shares units or other awards, and issue shares of RGA Common Stock upon exercise, conversion or settlement of any options, rights, shares, units or other awards in the ordinary course of business or consistent with past practice pursuant to result employee, director or consultant stock or benefit plans or to agreements with employees, directors or consultants or as an inducement to employment; (B) issue shares pursuant to, or amend solely in any order to modify the warrants so that the warrants are convertible into RGA Class A Common Stock following the Recapitalization, the Warrant Agreement between RGA and The Bank of New York Trust Company, N.A., as successor warrant agent to The Bank of New York, dated as of December 18, 2001; (C) issue shares pursuant to, or amend in order to make such modifications as are consistent with those made to the warrant agreement described in preceding clause (B), the Unit Agreement, dated as of December 18, 2001, among RGA, RGA Capital Trust I, a Delaware statutory trust (the “Trust”), acting as agent for the holders of the representations units from time to time, and warranties The Bank of Seller New York Trust Company, N.A., as successor unit agent to The Bank of New York, The Bank of New York Trust Company, N.A., as successor property trustee for the Trust to The Bank of New York and The Bank of New York (Delaware), as the Delaware trustee; and (D) enter into, or the Beneficial Owners set forth herein being cause its subsidiaries to enter into, one or becoming untrue in any material respect more transactions to finance regulatory or in any of the conditions set forth herein not being satisfiedoperational requirements, including regulatory reserve collateral requirements, under Regulation XXX;
(ii) amend except in connection with a Section 382 Shareholder Rights Plan or otherwise change to the organizational documents extent permitted by clause (i) of Seller;
(iii) Section 7.1(a), any other shareholder rights plan, (A) authorizeredeem, issuepurchase or otherwise acquire any of its outstanding shares of capital stock, sell or transfer any membership interests other securities thereof or any rights, warrants or options to acquire any such shares or securities, except in connection with the exercise of any options, rights, shares, units or other securities of Sellerawards pursuant to employee, director or consultant stock or benefit plans or to agreements with employees, directors or consultants or as an inducement to employment, (B) adjust, split, combine or reclassify or otherwise amend the terms of any membership interest or other security of Seller, (C) declare, authorize, set aside make for payment or pay any dividend on, or make any other A-30 distribution (whether in cash, stock or other propertyform) in respect of, any shares of its capital stock (other than ordinary course quarterly cash dividends to RGA’s shareholders (including any increases in such quarterly dividends) or dividends by any Subsidiary of RGA to RGA or any other Subsidiary of RGA), (C) adjust, split, combine, subdivide or reclassify any shares of its capital stock, or (D) enter into any agreement Contract, understanding or arrangement with respect to the voting sale, voting, registration or repurchase of RGA Common Stock or the capital stock of any equity Subsidiary of SellerRGA, other than employee, director or consultant stock or benefit plans or agreements or as an inducement to employment;
(iii) acquire or enter into an agreement to acquire any businesses, assets, product lines, business units, business operations, stock or other properties, including by way of merger or consolidation, other than acquisitions that are not material to RGA and its Subsidiaries, taken as a whole;
(iv) (A) merge enter into or consolidate with discontinue any other Personline of business material to RGA and its Subsidiaries, acquire any business or assets of any other Person (whether by merger, stock purchase, asset purchase or other business combination), other than the purchase of supplies in the Ordinary Course of Business or (B) form any new Subsidiary;taken as a whole; or
(v) (A) materially change the operation of the Businessauthorize any of, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of business;
(vi) make any loans, advances or capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of Business);
(vii) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on or otherwise encumber any Assets, other than in the Ordinary Course of Business;
(ix) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur any Indebtedness or issue any debt securities or warrants or other rights to acquire debt securities of Seller or assume, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person for Indebtedness or capital obligations, in the case of any of the foregoing;
(xii) cancel any debts owed to or claims held by Seller in excess of $35,000;
(xiii) abandon, disclaim, dedicate to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreement;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;
(xv) revalue any of the assets of the Seller, except as required by GAAP, or enter into, or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contract;
(xvi) (A) change any method of accounting or accounting practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Business;
(xvii) make, revoke or change any Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date;
(xviii) modify, amend or terminate (other than pursuant to the expiration of its term other than as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunder;
(xix) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property;
(xx) commence, settle or compromise any Proceeding;
(xxi) cancel, materially reduce or fail to maintain any insurance policy;
(xxii) change or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;
(xxiii) engage in any transaction with any Related Parties; or
(xxiv) authorize do or enter into any agreement, commitment or understanding (whether written or oral) binding Contract with respect to any of, the foregoingforegoing actions in clauses (i) through (iv) of this Section 7.1(b).
Appears in 1 contract
Sources: Recapitalization and Distribution Agreement (Reinsurance Group of America Inc)
Interim Operations. Between signing of this Agreement and Closing, Seller shall cause each of the Company and its Subsidiaries (unless Purchaser shall otherwise approve in writing, which approval shall not be unreasonably withheld or delayed, and except as otherwise expressly contemplated hereby or set forth in the Seller Disclosure Schedule) to:
(a) From the date hereof until the earlier other than consummation of the Closing or termination of this AgreementScolari Acquisition, Seller shall (i) operate the Business only conduct its business in the Ordinary Course of Businessordinary and usual course and, including maintaining appropriate service levelsto the extent consistent therewith, and in compliance with applicable Law including any COVID-19 Measures; and (ii) use commercially all reasonable efforts to (A) maintain and preserve intact the its business organization intact and maintain its existing relations and goodwill of the Business, the Assets and the Assumed Liabilities, (B) maintain satisfactory relationships with Seller’s clients, operators, distributors, customers, insurance underwriters suppliers and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services of, the Business Employees.employees;
(b) Without limiting the generality of the foregoing, except as set forth in Section 5.1(bnot amend its Organizational Documents;
(c) of the Disclosure Schedule, as expressly permitted by this Agreement or as approved in writing by ▇▇▇▇▇, from the date hereof until the earlier of the Closing or the termination of this Agreement, Seller shall not take any action which would require disclosure on Section 2.8 of the Disclosure Schedule or:
(i) take or omit to take any action that results or may reasonably be expected to result in any of the representations and warranties of Seller or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfied;
(ii) amend or otherwise change the organizational documents of Seller;
(iii) (A) authorize, issue, sell or transfer any membership interests or other securities of Seller, (B) adjust, split, combine or reclassify or otherwise amend the terms of any membership interest or other security of Seller, (C) declare, authorize, set aside make or pay any dividend or other distribution (whether in cash, stock or other property) or (D) enter into any agreement with respect to the voting of any equity of Seller;
(iv) (A) merge or consolidate with any other Person, acquire any business or assets of any other Person (whether by merger, stock purchase, asset purchase or other business combination), other than the purchase of supplies in the Ordinary Course of Business or (B) form any new Subsidiary;
(v) (A) materially change the operation of the Business, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of business;
(vi) make any loans, advances or capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of Business);
(vii) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on or otherwise encumber any Assetsshares of the Company or its Subsidiaries capital stock, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of the Company or its Subsidiaries capital stock of any class; (ii) transfer, sell, dispose of or encumber any material portion of its assets, other than sales of inventory in the ordinary course of business and other than amounts in cash equal to the Pre-Closing Distributions, provided that, CHF 1’000’000 of the Pre-Closing Distributions will not be distributed by the Company or its Subsidiaries until Closing and will be available for funding of the Reserve Amount at Closing; or (iii) other than in the Ordinary Course ordinary course of Business;
(ix) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree tobusiness, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur any Indebtedness or issue any debt securities or warrants or other rights to acquire debt securities of Seller or assume, guarantee or endorse, as an accommodation or otherwise, endorse the obligations of any Person for Indebtedness or capital obligations, in the case of any of the foregoingPerson;
(xiid) cancel other than as may be required by applicable Law, not (i) increase the compensation payable or to become payable to Group Employees; (ii) grant any debts owed rights to severance or claims held by Seller termination pay to, or enter into any employment or severance agreement with any Group Employee (other than in excess of $35,000connection with the Scolari Acquisition); or (iii) establish, adopt, enter into or amend, any collective bargaining agreement or Benefit Plan;
(xiiie) abandonexcept in the ordinary course of business, disclaim, dedicate to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreement;
not (xivi) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;
(xv) revalue any of the assets of the Seller, except as required by GAAP, or enter into, or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contract;
(xvi) (A) change any method of accounting or accounting practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Business;
(xvii) make, revoke or change any Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date;
(xviii) modify, amend or terminate any contract or agreement that would be material to the Company and its Subsidiaries taken as a whole (other than pursuant in connection with the Scolari Acquisition); or (ii) exclusively license to the expiration of its term other than as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign third party any material rights or claims thereunder;
(xix) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property;
(xxf) commenceother than consummation of the Scolari Acquisition, not acquire by merger, consolidation, acquisition of assets or equity interests or any similar transaction any corporation, partnership, limited liability company or other business organization or all or substantially all of the assets of any such entity;
(g) except in the ordinary course of business, not settle or compromise any Proceedingmaterial claims or litigation;
(xxih) cancelnot make any material change, materially reduce other than as required by Swiss GAAP or fail U.S. GAAP, to maintain any insurance policyits accounting principles or procedures;
(xxiii) change except as described in the funds flow chart attached as Annex C, not make any payment or modify the Seller’s credit, collection, distribution to Seller or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;its Affiliates; and
(xxiiij) engage in any transaction with any Related Parties; or
(xxiv) not authorize or enter into an agreement to do any agreement, commitment or understanding (whether written or oral) with respect to of the foregoing.
Appears in 1 contract
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and until the earlier to occur of the termination of this Agreement pursuant to Article VIII and the Effective Time (unless Parent shall otherwise approve in writing, which approval in the case of clauses (c)(ii), (c)(iv), (c)(vi), (e), (f) and (k) below shall not be unreasonably withheld, delayed or conditioned and except as otherwise permitted or required by this Agreement or described in Section 6.1 of the Company Disclosure Letter):
(a) From the date hereof until business of it and its Subsidiaries shall be conducted in the earlier ordinary course and consistent with past practice;
(b) it shall not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend or propose to amend the Closing Company Charter or termination the Company Bylaws; (iii) split, combine or reclassify its outstanding shares of this Agreementcapital stock or any class thereof; (iv) declare, Seller set aside or pay any dividend payable in cash, stock or property in respect of any capital stock other than (A) dividends from its direct or indirect wholly-owned Subsidiaries to the Company, or (B) dividends payable on the Series C Preferred Shares pursuant to and in accordance with the existing terms thereof; or (v) repurchase, redeem or otherwise acquire, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(c) neither it nor any of its Subsidiaries shall (i) operate the Business only in the Ordinary Course issue, sell, pledge, dispose of Business, including maintaining appropriate service levels, and in compliance with applicable Law including or encumber any COVID-19 Measures; and (ii) use commercially reasonable efforts to (A) maintain and preserve intact the business organization and goodwill of the Business, the Assets and the Assumed Liabilities, (B) maintain satisfactory relationships with Seller’s clients, operators, distributors, customers, insurance underwriters and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, its capital stock of any class (other than Common Shares issuable pursuant to Company Options outstanding on the Business Employees.
(b) Without limiting date hereof under the generality of the foregoing, except Stock Plans as set forth in Section 5.1(b) of the Company Disclosure Schedule, as expressly permitted by this Agreement or as approved in writing by ▇▇▇▇▇, from the date hereof until the earlier of the Closing or the termination of this Agreement, Seller shall not take any action which would require disclosure on Section 2.8 of the Disclosure Schedule or:
(i) take or omit to take any action that results or may reasonably be expected to result in any of the representations and warranties of Seller or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfied;
Letter); (ii) amend or otherwise change the organizational documents of Seller;
(iii) (A) authorize, issue, sell or transfer any membership interests or other securities of Seller, (B) adjust, split, combine or reclassify or otherwise amend the terms of any membership interest or other security of Seller, (C) declare, authorize, set aside make or pay any dividend or other distribution (whether in cash, stock or other property) or (D) enter into any agreement with respect to the voting of any equity of Seller;
(iv) (A) merge or consolidate with any other Person, acquire any business or assets of any other Person (whether by merger, stock purchase, asset purchase or other business combination), other than the purchase of supplies in the Ordinary Course of Business or (B) form any new Subsidiary;
(v) (A) materially change the operation of the Business, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of business;
(vi) make any loans, advances or capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of Business);
(vii) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, or encumber or suffer to exist any Encumbrance (except for Permitted Encumbrances) in respect of, any assets in excess of $250,000 in the aggregate other than (A) sales of inventories (and/or licenses in connection therewith) in the ordinary course of business consistent with past practice and (B) dispositions of obsolete or worthless assets; (iii) incur any Lien on indebtedness for borrowed money other than borrowings (including issuance of letters of credit) and reborrowings under its or any of its Subsidiaries' credit facilities, as such credit facilities are in existence as of the date hereof without regard to any subsequent amendment or modification, that would at any given time cause the net funded amount of indebtedness outstanding under such credit facilities to be in excess of $4,000,000 in the aggregate (the "Maximum Amount"); provided, however, that the Company may incur indebtedness under such credit facilities in excess of the Maximum Amount to the extent that the senior management of the Company reasonably determines that it is in the best interests of the Company to borrow such additional amounts in order to fund operations of the business of the Company and its Subsidiaries in the ordinary course; and provided, further that prior to taking any actions permitted by the foregoing proviso the Company shall give Parent three Business Days' prior written notice that it intends to take such actions; (iv) make or commit for any capital expenditures in the aggregate in excess of the Company's budget for capital expenditures, in each case, for the applicable fiscal year; (v) loan, advance funds or make any investment in or capital contribution to any other Person other than to any Subsidiary; or (vi) acquire (by merger, consolidation, or acquisition of stock or assets) any Person;
(d) except as required by Law, neither it nor any of its Subsidiaries shall terminate, establish, adopt, enter into, amend or otherwise encumber modify any AssetsCompany Compensation and Benefit Plans in a manner that would materially increase benefits thereunder or increase the salary, wage, bonus or other compensation of any employees except salary increases as a result of employee promotions occurring in the ordinary course of business consistent with past practices;
(e) neither it nor any of its Subsidiaries shall (i) settle or compromise any material claims or litigation in excess of $250,000 in the aggregate other than (A) settlements and compromises in the ordinary course of business and (B) settlements and compromises of liabilities not in excess of $500,000 reflected or reserved against on the financial statements included in the Company Reports; or (ii) waive, release or assign any material rights or claims in excess of $250,000 in the aggregate other than in the Ordinary Course ordinary course of Businessbusiness; provided, however, that the Company shall not settle any Governmental claims or proceedings if such settlement would result in suspension, debarment or injunctive relief that is material to the businesses of the Company and its Subsidiaries taken as a whole or that would otherwise materially affect Parent and its Affiliates;
(ixf) acquire neither it nor any real property of its Subsidiaries shall make any material Tax election, change any annual Tax accounting period, adopt or undertake change any material method of Tax accounting, extend or commit waive any applicable statute of limitations with respect to undertake capital expenditures for the purchase Taxes, enter into any closing agreement in respect of equipment any material Tax claim, audit or tangible assets exceeding $35,000 assessment, surrender any right to claim a material Tax refund, offset or other reduction in the aggregatea material Tax liability or settle or compromise any material Tax liability;
(xg) agree to, request or adopt use commercially reasonable efforts to (Ai) any moratorium or suspension of payment of any Indebtednesspreserve intact its business organization and goodwill, (Bii) keep available the appointment services of a receiverits present officers and key employees and (iii) preserve the goodwill and business relationships with customers, administratorsuppliers and others having business relationships with Company;
(h) use commercially reasonable efforts to maintain with financially responsible insurance companies insurance on its tangible assets and its business in such amounts and against such risks and losses as are consistent with past practice;
(i) not enter into any plan of complete or partial liquidation, liquidatordissolution, assigneemerger, trustee consolidation, restructuring, recapitalization or other similar official with respect to Seller, (C) an assignment for the benefit reorganization of creditors Company or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of its Subsidiaries (other than the foregoing (A) through (Ctransactions contemplated by this Agreement);
(xij) incur not alter, through merger, liquidation, reorganization, restructuring or any Indebtedness or issue any debt securities or warrants or other rights to acquire debt securities of Seller or assume, guarantee or endorse, as an accommodation or otherwisefashion, the obligations of any Person for Indebtedness corporate structure or capital obligations, in the case ownership of any of the foregoingCompany's Subsidiaries;
(xiik) cancel any debts owed to or claims held by Seller in excess of $35,000;
(xiii) abandon, disclaim, dedicate to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreement;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;
(xv) revalue any of the assets of the Seller, except as required by GAAPGAAP or as recommended in writing by the Company's independent auditors, (i) not revalue in any material respect any of its assets, including writing down the value of inventory or writing-off notes or accounts receivables other than in the ordinary course of business consistent with past practice, or enter into, or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contract;
(xvi) (Aii) change any method of accounting or accounting principles or practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Business;
(xviil) makenot (i) grant any material severance, revoke retention or change termination pay to, or amend in any Tax election by Seller that could adversely impact the amount material respect any existing severance, retention or termination arrangement with, any current or former director, officer or employee of Taxes due Company or payable any of its Subsidiaries, (and/or any direct or indirect owner of equity interests in Buyerii) after the Closing Date;
(xviii) modify, amend or terminate (other than pursuant except to the expiration extent required under Contracts existing as of its term other than as a result of any action taken by Sellerthe date hereof, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunder;
(xix) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property;
(xx) commence, settle or compromise any Proceeding;
(xxi) cancel, materially reduce or fail to maintain any insurance policy;
(xxii) change or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) increase in any material respect or fail to pay or delay payment of payables or other Liabilities accelerate in any material respect;
respect the payment or vesting of, any benefits payable under any existing severance, retention or termination pay policies or employment agreements, (xxiiiiii) engage enter into or amend in any transaction material respect any employment, consulting, deferred compensation or other similar agreement with any Related Partiesdirector, officer, consultant or employee of Company or any of its Subsidiaries or (iv) establish, adopt or amend (except as required by applicable law) any collective bargaining agreement, bonus, profit-sharing, thrift, pension, retirement, post-retirement medical or life insurance, retention, deferred compensation, compensation, stock option, restricted stock or other benefit plan or arrangement covering any present or former director, officer or employee, or any beneficiaries thereof, of Company or any of its Subsidiaries; or
(xxivm) neither it nor any of its Subsidiaries will authorize or enter into an agreement to do any agreement, commitment or understanding (whether written or oral) with respect to of the foregoing, or commit to any of the foregoing actions.
Appears in 1 contract
Sources: Merger Agreement (Meggitt USA Inc)
Interim Operations. (a) From the date hereof until the earlier of the Closing or termination of this Agreement, Seller shall Except (i) operate as described in Section 5.1(a) of the Business only in the Ordinary Course of BusinessCompany Disclosure Letter, including maintaining appropriate service levels, and in compliance with applicable Law including any COVID-19 Measures; and (ii) as otherwise expressly required or permitted by this Agreement or any other Transaction Document, (iii) as required by applicable Law or COVID-19 Measures or (iv) as Parent shall otherwise consent to in writing (which consent shall not be unreasonably withheld, conditioned, delayed, or denied), the Company covenants and agrees as to itself and its Subsidiaries that, during the period from the date of this Agreement until the Closing, the Company shall use commercially reasonable efforts to (A) maintain and preserve intact operate the business organization of it and goodwill of its Subsidiaries in the Businessordinary course consistent with past practice and to preserve their business organizations intact and maintain existing relations with the Company Top Suppliers, the Assets Company Top Customers and the Assumed Liabilities, (B) maintain satisfactory relationships with SellerCompany’s clients, operators, distributors, customers, insurance underwriters and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services of, the Business Employeesexecutive officers.
(b) Without limiting the generality of of, and in furtherance of, the foregoing, from the date of this Agreement until the Closing, except (w) as set forth described in the corresponding subsection of Section 5.1(b) of the Company Disclosure ScheduleLetter, (x) as otherwise expressly required or permitted by this Agreement or any Transaction Document, (y) as approved required by applicable Law or COVID-19 Measures or (z) as Parent shall otherwise consent to in writing by ▇▇▇▇▇, from the date hereof until the earlier of the Closing or the termination of this Agreement, Seller (which consent shall not take any action which would require disclosure on Section 2.8 of be unreasonably withheld, conditioned, delayed or denied), the Disclosure Schedule orCompany will not and will not permit its Subsidiaries to:
(i) take adopt or omit to take propose any action that results change in its or may reasonably be expected to result in any of the representations and warranties of Seller or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfiedits Subsidiaries’ Organizational Documents;
(ii) amend (A) merge or otherwise change consolidate itself or any of its Subsidiaries with any other Person, except for transactions among its wholly owned Subsidiaries or (B) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the organizational documents of SellerCompany or its Subsidiaries;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of $100,000, or acquire any business or entity (whether by merger or consolidation, by purchase of substantially all assets or equity interests or by any other manner), in each case, in any transaction or series of related transactions, other than acquisitions or other transactions pursuant to Contracts to which the Company or any of its Subsidiaries are a party that are in effect as of the date of this Agreement;
(iv) sell, lease, license or otherwise dispose of any of its material assets or properties (other than Intellectual Property), except (A) authorizefor sales, leases, licenses or other dispositions in the ordinary course of business and (B) for sales, leases, licenses or other dispositions of assets and properties with a fair market value not in excess of $100,000 in the aggregate or (C) pursuant to Contracts to which the Company or any of its Subsidiaries are a party that are in effect as of the date of this Agreement;
(v) except pursuant to awards granted under the Company’s Stock Plan, issue, sell sell, grant or transfer authorize the issuance, sale or grant of any membership interests shares of capital stock or other securities of Sellerthe Company or any of its Subsidiaries (other than issuances by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company), or any options, warrants, convertible securities, subscription rights or other similar rights entitling its holder to receive or acquire any shares of such capital stock or other securities of the Company or any of its Subsidiaries;
(Bvi) adjustreclassify, split, combine combine, subdivide, redeem or reclassify repurchase, any of capital stock of the Company or otherwise amend options, warrants or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except in connection with the terms net exercise or settlement of any membership interest or other security of Seller, awards under the Company’s Stock Plan;
(Cvii) declare, authorizeset aside, set aside make or pay any dividend or other distribution (whether distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or other property) or (D) enter into any agreement with respect to the voting of any equity of Sellerits capital stock;
(ivviii) (A) merge make any loans, advances, guarantees or consolidate with capital contributions to or investments in any other Person, acquire any business or assets of any other Person (whether by merger, stock purchase, asset purchase other than the Company or other business combinationany direct or indirect wholly-owned Subsidiary of the Company), other than the purchase of supplies in the Ordinary Course of Business or (B) form any new Subsidiary;
(v) (A) materially change the operation of the Business, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line ordinary course of business;
(vi) make any loans, advances or capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of Business);
(vii) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on or otherwise encumber any Assets, other than in the Ordinary Course of Business;
(ix) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur any Indebtedness for borrowed money or guarantee any such Indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt securities security of Seller the Company or assumeany of its Subsidiaries, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person except for Indebtedness for borrowed money incurred in the ordinary course of business consistent with past practice, not to exceed $100,000 in the aggregate;
(x) make or commit to make capital obligationsexpenditures other than in an amount not in excess of $250,000, in the case aggregate;
(xi) enter into any Contract that would have been a Material Contract had it been entered into prior to the date of any this Agreement, other than in the ordinary course of the foregoingbusiness;
(xii) cancel amend or modify in any debts owed to material respect or terminate any Material Contract, or waive or release any material rights, claims held by Seller or benefits under any Material Contract, in excess each case, other than in the ordinary course of $35,000business;
(xiii) abandonmake any material changes with respect to its accounting policies or procedures, disclaim, dedicate to the public, sell, assign except as required by changes in Law or grant any security interest in, to or under any Business Intellectual Property or Business IP AgreementGAAP;
(xiv) disclose settle any confidential Proceeding, except in the ordinary course of business or proprietary information where such settlement is covered by insurance or confidential Business Intellectual Property to any Person, other involves only the payment of monetary damages in an amount not more than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with $375,000 in the Selleraggregate;
(xv) revalue any except in the ordinary course of the assets of the Seller, except as required by GAAP, or enter into, or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contract;
(xvi) (A) change any method of accounting or accounting business consistent with past practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s booksfile any material amended Tax Return, accounts and records in the Ordinary Course of Business;
(xvii) make, revoke or change any material Tax election in a manner inconsistent with past practice, adopt or change any material Tax accounting method or period, enter into any agreement with a Governmental Entity with respect to material Taxes, settle or compromise any examination, audit or other action with a Governmental Entity of or relating to any material Taxes or settle or compromise any claim or assessment by Seller a Governmental Entity in respect of material Taxes, or enter into any Tax sharing or similar agreement (excluding any commercial contract not primarily related to Taxes), in each case, to the extent such action could reasonably be expected to have any adverse and material impact on Parent;
(xvi) except in the ordinary course of business or pursuant to the terms of any Company Benefit Plan in effect as of the date of this Agreement or as required by Law, (A) increase the annual salary or consulting fees or target annual cash bonus opportunity, of any Company Employee with an annual salary or consulting fees and target annual cash bonus opportunity in excess of $250,000 as of the date of this Agreement, (B) become a party to, establish, adopt, amend, or terminate any material Company Benefit Plan or any arrangement that could adversely impact would have been a material Company Benefit Plan had it been entered into prior to this Agreement, (C) take any action to accelerate the amount vesting or lapsing of Taxes due restrictions or payable payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Benefit Plan, (and/or D) forgive any direct loans or indirect owner issue any loans (other than routine travel advances issued in the ordinary course of equity interests business) to any Company Employee, (E) hire any employee or engage any independent contractor (who is a natural person) with annual salary or consulting fees and target annual cash bonus opportunity in Buyerexcess of $250,000 or (F) after terminate the Closing Dateemployment of any executive officer other than for cause;
(xvii) sell, assign, lease, exclusively license, pledge, encumber, divest, abandon, allow to lapse or expire any material Company Intellectual Property, other than grants of non-exclusive licenses in the ordinary course of business to customers for use of the products or services of the Company or otherwise in the ordinary course of business;
(xviii) modifybecome a party to, amend establish, adopt, amend, commence participation in or terminate (other than pursuant to the expiration of its term other than as a result of enter into any action taken by Seller, collective bargaining or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunderlabor union Contract;
(xix) fail to pay use commercially reasonable efforts to keep current and in full force and effect, or to comply with the requirements of, or to apply for or renew, any required maintenance permit, approval, authorization, consent, license, registration or other similar fees or otherwise fail certificate issued by any Governmental Entity that is material to make required filings or payments required to maintain the conduct of the business of the Company and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandonits Subsidiaries, let lapse or fail to protect any Owned Intellectual Propertytaken as a whole;
(xx) commence, settle file any prospectus supplement or compromise registration statement or consummate any Proceedingoffering of securities that requires registration under the Securities Act or that includes any actual or contingent commitment to register such securities under the Securities Act in the future;
(xxi) cancel, materially reduce or fail to maintain maintain, cancel or materially change coverage under, in a manner materially detrimental to the Company or any of its Subsidiaries, any insurance policypolicy maintained with respect to the Company and its Subsidiaries and their assets and properties;
(xxii) change or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in enter into any material respect or fail to pay or delay payment new line of payables or other Liabilities in any material respect;business outside of the business currently conducted by the Company and its Subsidiaries as of the date of this Agreement; or
(xxiii) engage in agree or authorize to do any transaction with any Related Parties; or
(xxiv) authorize or enter into any agreement, commitment or understanding (whether written or oral) with respect to of the foregoing.
Appears in 1 contract
Interim Operations. (a) From The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof until and prior to the earlier Effective Time (unless Parent shall otherwise approve in writing and except as otherwise expressly contemplated by this Agreement), the business of the Closing or termination of this Agreement, Seller Company and its Subsidiaries shall (i) operate the Business only be conducted in the Ordinary Course of Businessordinary and usual course and, including maintaining appropriate service levelsto the extent consistent therewith, the Company and in compliance with applicable Law including any COVID-19 Measures; and (ii) its Subsidiaries shall use commercially their respective reasonable best efforts to (A) maintain and preserve intact the its business organization intact and maintain its existing relations and goodwill of the Businesswith customers, the Assets and the Assumed Liabilities, (B) maintain satisfactory relationships with Seller’s clients, operatorssuppliers, distributors, customerscreditors, insurance underwriters lessors, employees and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services of, the Business Employees.
(b) associates. Without limiting the generality of the foregoing, from the date hereof to the Effective Time except as set forth in Section 5.1(b) of the Company Disclosure Schedule, Schedule (unless Parent shall otherwise approve in writing and except as otherwise expressly permitted contemplated by this Agreement Agreement):
(a) the Company shall not, and shall cause its Subsidiaries not to enter into, terminate, or as approved in writing by ▇▇▇▇▇materially extend or modify any material Contract; provided, from further, that neither the date hereof until the earlier Company nor any of the Closing or the termination of this Agreement, Seller its Subsidiaries shall not take any action which would require disclosure on Section 2.8 of the Disclosure Schedule or:
enter into (i) take any time charters or omit bareboat charters having a term of more than sixty days but equal to take or less than 12 months without first consulting with Parent or (ii) any action that results time charters or may reasonably bareboat charters having a term of more than 12 months, consecutive voyage arrangements or pooling arrangements, in each case in this clause (ii), without the prior express written consent of Parent, such consent not to be expected to result unreasonably withheld;
(b) the Company shall not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of the representations and warranties of Seller or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfied;
its Subsidiaries; (ii) amend or otherwise change the organizational documents of Seller;
its Organizational Documents; (iii) (A) authorize, issue, sell or transfer any membership interests or other securities of Seller, (B) adjust, split, combine or reclassify or otherwise amend the terms its outstanding shares of any membership interest or other security of Seller, capital stock; (Civ) declare, authorize, set aside make or pay any dividend or other distribution (whether payable in cash, stock or property in respect of any capital stock other property) than dividends from its direct or indirect wholly-owned Subsidiaries; or (Dv) enter repurchase, redeem or otherwise acquire, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any agreement with respect to the voting shares of any equity of Sellerits capital stock;
(ivc) neither the Company nor any of its Subsidiaries shall (Ai) merge issue, sell, pledge, dispose of or consolidate with encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class or any other Person, acquire any business property or assets of any other Person assets; (whether by merger, stock purchase, asset purchase or other business combination), other than the purchase of supplies in the Ordinary Course of Business or (B) form any new Subsidiary;
(v) (A) materially change the operation of the Business, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of business;
(vi) make any loans, advances or capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of Business);
(vii) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viiiii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on or otherwise encumber any Assetsother property or assets (including capital stock of any of its Subsidiaries) or incur or modify any material indebtedness or other liability; (iii) make or authorize or commit for any capital expenditures in amounts greater than $100,000 individually and $1,000,000 in the aggregate, other than such capital expenditures made pursuant to new building contracts, drydocking arrangements or Vessel upgrading arrangements, in each case, existing on the date of this Agreement and explicitly disclosed in the Ordinary Course Company's 1999 budget delivered to Parent on March 26, 1999; or (iv) by any means, make any acquisition of, or investment in, assets or stock of Businessany other Person or entity;
(ixd) acquire neither the Company nor any real property of its Subsidiaries shall terminate, establish, adopt, enter into, make any new grants or undertake awards under, amend or commit to undertake capital expenditures for otherwise modify, any Compensation and Benefit Plans or increase the purchase salary, wage, bonus or other compensation of equipment or tangible assets exceeding $35,000 in the aggregateany employees;
(xe) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) neither the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as Company nor any of the foregoing (A) through (C);
(xi) incur its Subsidiaries shall settle or compromise any Indebtedness material claims or issue any debt securities litigation or warrants or other rights to acquire debt securities of Seller or assume, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person for Indebtedness or capital obligations, in the case of any of the foregoing;
(xii) cancel any debts owed to or claims held by Seller in excess of $35,000;
(xiii) abandon, disclaim, dedicate to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreement;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;
(xv) revalue any of the assets of the Seller, except as required by GAAP, or enter into, or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contract;
(xvi) (A) change any method of accounting or accounting practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Business;
(xvii) make, revoke or change any Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date;
(xviii) modify, amend or terminate (other than pursuant to the expiration any of its term other than as a result of any action taken by Sellermaterial Contracts or waive, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunderclaims;
(xixf) fail to pay neither the Company nor any required maintenance or other similar fees of its Subsidiaries shall make any Tax election or otherwise fail alter any Tax or accounting practice or procedure, or permit any insurance policy naming it as a beneficiary or loss-payable payee to make required filings be canceled or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Propertyterminated;
(xxg) commence, settle neither the Company nor any of its Subsidiaries shall take any action or compromise omit to take any Proceeding;
(xxi) cancel, materially reduce or fail action that would cause any of its representations and warranties herein to maintain any insurance policy;
(xxii) change or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities become untrue in any material respect;; and
(xxiiih) engage in neither the Company nor any transaction with any Related Parties; or
(xxiv) of its Subsidiaries shall authorize or enter into an agreement to do any agreement, commitment or understanding (whether written or oral) with respect to of the foregoing.
Appears in 1 contract
Interim Operations. (ai) From The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof until and prior to the earlier of the Closing or termination of Effective Time (unless Parent shall otherwise approve in writing, and except as otherwise expressly contemplated by this Agreement) and except as required by applicable Laws, Seller the business of it and its Subsidiaries shall (i) operate the Business only be conducted in the Ordinary Course of Businessordinary and usual course and, including maintaining appropriate service levelsto the extent consistent therewith, it and in compliance with applicable Law including any COVID-19 Measures; and (ii) its Subsidiaries shall use their respective commercially reasonable efforts to (A) preserve their business organizations intact and maintain and preserve intact the business organization existing relations and goodwill of the Businesswith Governmental Entities, the Assets and the Assumed Liabilitiescustomers, (B) maintain satisfactory relationships with Seller’s clients, operatorssuppliers, distributors, customerscreditors, insurance underwriters lessors, employees and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, associates and keep available the services of, of the Business Employees.
(b) present employees and agents of the Company and its Subsidiaries. Without limiting the generality of the foregoingforegoing and in furtherance thereof, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as Parent may approve in writing (such approval not to be unreasonably withheld, conditioned or delayed) or (C) as set forth in Section 5.1(b) 6.1 of the Company Disclosure ScheduleLetter, the Company will not and will not permit its Subsidiaries to:
(a) adopt or propose any change in its articles of organization or by-laws or other applicable governing instruments;
(b) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly-owned Subsidiaries of the Company or pursuant to Contracts in effect as expressly permitted by this Agreement or as approved in writing by ▇▇▇▇▇, from of the date hereof until the earlier of the Closing or the termination of this Agreement, Seller shall or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(c) acquire assets or any securities of any business from any other Person, whether or not take in the ordinary course of business, in any action which would require disclosure on Section 2.8 transaction or series of the Disclosure Schedule or:
related transactions, other than (i) take or omit acquisitions in accordance with capital budgets previously provided, (ii) acquisitions pursuant to take any action that results or may reasonably be expected to result Contracts in any effect as of the representations date of this Agreement, (iii) acquisitions with a value or purchase price in the aggregate of less than $50,000 or (iv) acquisitions of inventory and warranties other daily purchases in the ordinary course of Seller or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfiedbusiness;
(iid) amend issue, sell, pledge, dispose of, grant, transfer, encumber, or otherwise change authorize the organizational documents issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of Sellercapital stock of the Company or any its Subsidiaries (other than the issuance of shares by a wholly-owned Subsidiary of the Company to the Company or another wholly-owned Subsidiary), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, other than required issuances of shares of Company Common Stock upon the exercise of Company Stock Options outstanding as of the date of this Agreement;
(iiie) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $100,000 in the aggregate;
(Af) authorizemake any loans, issue, sell advances or transfer capital contributions to or investments in any membership interests Person (other than the Company or other securities any direct or indirect wholly-owned Subsidiary of Seller, the Company) in excess of $100,000 in the aggregate;
(B) adjust, split, combine or reclassify or otherwise amend the terms of any membership interest or other security of Seller, (Cg) declare, authorizeset aside, set aside make or pay any dividend or other distribution (whether distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other propertydirect or indirect wholly-owned Subsidiary) or (D) enter into any agreement with respect to the voting of any equity of Sellerits capital stock;
(ivh) (A) merge reclassify, split, combine, subdivide or consolidate with any other Personredeem, acquire any business or assets of any other Person (whether by merger, stock purchase, asset purchase or other business combination)otherwise acquire, other than the purchase directly or indirectly, any of supplies in the Ordinary Course its capital stock or securities convertible or exchangeable into or exercisable for any shares of Business or (B) form any new Subsidiaryits capital stock;
(v) (A) materially change the operation of the Business, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of business;
(vi) make any loans, advances or capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of Business);
(vii) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on or otherwise encumber any Assets, other than in the Ordinary Course of Business;
(ix) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C);
(xii) incur any Indebtedness indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt securities security of Seller the Company or assumeany of its Subsidiaries, guarantee except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (i) not to exceed $100,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or endorsemore beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregate;
(j) except as set forth in the capital budgets previously provided, make or authorize any capital expenditure in excess of $100,000 in the aggregate during any twelve (12) month period;
(k) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement;
(l) make any changes with respect to accounting policies or procedures, except as required by changes in GAAP;
(m) settle any litigation or other proceedings before a Governmental Entity for an accommodation amount in excess of $100,000 (net of insurance coverage) or otherwiseany disputed obligation or liability of the Company in excess of such amount;
(n) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts or claims held by it or waive any rights having in each case a value in excess of $100,000;
(o) make or change any material Tax election, change an annual accounting period, file any amended Tax Return, enter into any closing agreement, waive or extend any statute of limitation with respect to Taxes, settle or compromise any Tax liability, claim or assessment, surrender any right to claim a refund of Taxes or take any other similar action relating to the obligations filing of any Person Tax Return or the payment of any Tax;
(p) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for Indebtedness product sales in the ordinary course of business, sales of obsolete assets or capital obligationssales, leases, licenses or other dispositions of assets with a fair market value not in excess of $100,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreement;
(q) except as set forth in Section 5.1(h)(i) of the Company Disclosure Letter, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, (iii) establish, adopt, amend or terminate any Benefit Plan or Pension Plan or amend the terms of any outstanding equity-based awards, (iv) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries.
(r) knowingly take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VIII not being satisfied; or
(s) agree, authorize or commit to do any of the foregoing;
(xiiii) cancel any debts owed to or claims held by Seller in excess of $35,000;
(xiii) abandon, disclaim, dedicate to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreement;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;
(xv) revalue any of the assets of the Seller, except as required by GAAP, or enter into, Parent shall not knowingly take or permit any of the assets its Subsidiaries to take any action that is reasonably likely to result in any of the Seller to become bound by any Contract that is or would constitute a Material Contract;
(xvi) (A) change any method of accounting or accounting practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Business;
(xvii) make, revoke or change any Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date;
(xviii) modify, amend or terminate (other than pursuant conditions to the expiration of its term other than as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently Merger set forth in effect or termination release or assign any material rights or claims thereunder;
(xix) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property;
(xx) commence, settle or compromise any Proceeding;
(xxi) cancel, materially reduce or fail to maintain any insurance policy;
(xxii) change or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or Article VIII not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;
(xxiii) engage in any transaction with any Related Parties; or
(xxiv) authorize or enter into any agreement, commitment or understanding (whether written or oral) with respect to the foregoingbeing satisfied.
Appears in 1 contract
Interim Operations. (a) From the date hereof until the earlier Each of the Closing or termination of this AgreementVendors, Seller shall (i) operate jointly and severally, covenants and agrees that during the Interim Period the Business only shall be run in accordance with the Ordinary Course of Business, including maintaining appropriate service levels, and in compliance with applicable Law including any COVID-19 Measures; and (ii) use commercially reasonable efforts to (A) maintain and preserve intact the business organization and goodwill of the Business, the Assets and the Assumed Liabilities, (B) maintain satisfactory relationships with Seller’s clients, operators, distributors, customers, insurance underwriters and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services of, the Business Employees.
(b) Without limiting the generality of the foregoing, except as set forth in Section 5.1(b) of the Disclosure Schedule, as expressly permitted by this Agreement or as approved in writing by ▇▇▇▇▇, from the date hereof until the earlier of the Closing or the termination of this Agreement, Seller shall not take any action which would require disclosure on Section 2.8 of the Disclosure Schedule orfollowing provisions:
(i) take or omit to take any action that results or may reasonably be expected to result in any during the Interim Period the representatives of the representations Purchasers shall be entitled to have access to and warranties of Seller or be present at the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any Business premises of the conditions set forth herein not being satisfiedVendors at all times during the Vendors' reasonable business hours;
(ii) amend during the Interim Period the Vendors shall not, without the prior written consent of the Purchasers, such consent not to be unreasonably withheld or otherwise change delayed:
(A) permit any of the organizational documents of SellerPurchased Assets to be subjected to any Encumbrance;
(iii) (A) authorize, issue, sell or transfer any membership interests or other securities of Seller, (B) adjustsell, split, combine or reclassify transfer or otherwise amend the terms dispose of any membership interest or other security of Seller, the Purchased Assets;
(C) declaregrant any increase in the benefits, authorizerate of wages, set aside make salaries, or pay any dividend or other distribution (whether in cash, stock or other property) or bonuses for Employees;
(D) enter into make any agreement change in any method of accounting practice applicable to the Business;
(E) cancel or reduce any of its insurance coverage relating to Purchased Assets or the Business;
(F) commit to expend more than $10,000 in the aggregate with respect to any capital expenditure of the voting of any equity of SellerBusiness;
(ivG) acquire (Aby merger, amalgamation, consolidation or acquisition of shares or assets) merge any corporation, partnership or consolidate with other business organization or division thereof, or, other than in the ordinary course of business and within the limits specified herein, purchase any other Person, acquire any business property or assets of any other Person (whether by merger, stock purchase, asset purchase individual or other business combination), other than the purchase of supplies in the Ordinary Course of Business or (B) form any new Subsidiaryentity;
(vH) (A) materially change incur any obligations of any kind in excess of $100,000 in the operation aggregate in respect of the Business, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of business;; or
(viI) make any loans, advances authorize or capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of Business);
(vii) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on or otherwise encumber any Assets, other than in the Ordinary Course of Business;
(ix) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur any Indebtedness or issue any debt securities or warrants or other rights to acquire debt securities of Seller or assume, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person for Indebtedness or capital obligations, in the case of propose any of the foregoing;
(xii) cancel any debts owed to or claims held by Seller in excess of $35,000;
(xiii) abandon, disclaim, dedicate to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreement;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;
(xv) revalue any of the assets of the Seller, except as required by GAAP, or enter into, or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contract;
(xvi) (A) change any method of accounting or accounting practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Business;
(xvii) make, revoke or change any Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date;
(xviii) modify, amend or terminate (other than pursuant to the expiration of its term other than as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunder;
(xix) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property;
(xx) commence, settle or compromise any Proceeding;
(xxi) cancel, materially reduce or fail to maintain any insurance policy;
(xxii) change into or modify the Seller’s creditany contract, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;
(xxiii) engage in any transaction with any Related Parties; or
(xxiv) authorize or enter into any agreement, commitment or understanding (whether written or oral) with respect arrangement to do any of the foregoing; and
(iii) the Vendors shall:
(A) use their commercially reasonable efforts to keep available the services of the Employees and to maintain their relations and goodwill with the suppliers, customers, distributors and any others having business relations with the Business; and
(B) immediately upon becoming aware of the existence of:
1. any notice from, proceeding before or order of any governmental entity requiring it to comply with or take action under any Environmental Law,
2. any notice from a lender asserting a violation or breach of any loan covenant or any other provision of any financing agreement, or
3. any state of affairs respecting the Leased Premises, Purchased Assets or Business which could reasonably be expected to give rise to future environmental liabilities, the imposition of any fine, or the shutting down of the Business for any period of time, notify the Purchasers in writing and provide details of any actions taken in response.
Appears in 1 contract
Interim Operations. (a) From the date hereof until the earlier of the Closing or termination of this Agreement, Seller shall Except (i) operate as described in Section 5.1(a) of the Business only in the Ordinary Course of BusinessCompany Disclosure Letter, including maintaining appropriate service levels, and in compliance with applicable Law including any COVID-19 Measures; and (ii) as otherwise expressly required or permitted by this Agreement or any other Transaction Document, (iii) as required by applicable Law or COVID-19 Measures or (iv) as Parent shall otherwise consent to in writing (which consent shall not be unreasonably withheld, conditioned, delayed, or denied), the Company covenants and agrees as to itself and its Subsidiaries that, during the period from the date of this Agreement until the Closing, the Company shall use commercially reasonable efforts to (A) maintain and preserve intact operate the business organization of it and goodwill its Subsidiaries in the ordinary course of business and to preserve their business organizations intact and maintain existing relations with the BusinessCompany Top Suppliers, the Assets Company Top Customers and the Assumed Liabilities, (B) maintain satisfactory relationships with SellerCompany’s clients, operators, distributors, customers, insurance underwriters and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services of, the Business Employeesexecutive officers.
(b) Without limiting the generality of of, and in furtherance of, the foregoing, from the date of this Agreement until the Closing, except (w) as set forth described in the corresponding subsection of Section 5.1(b) of the Company Disclosure ScheduleLetter, (x) as otherwise expressly required or permitted by this Agreement or any Transaction Document, (y) as approved required by applicable Law or COVID-19 Measures or (z) as Parent shall otherwise consent to in writing by ▇▇▇▇▇, from the date hereof until the earlier of the Closing or the termination of this Agreement, Seller (which consent shall not take any action which would require disclosure on Section 2.8 of be unreasonably withheld, conditioned or delayed), the Disclosure Schedule orCompany will not and will not permit its Subsidiaries to:
(i) take adopt or omit to take propose any action that results change in its or may reasonably be expected to result in any of the representations and warranties of Seller or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfiedits Subsidiaries’ Organizational Documents;
(ii) amend (A) merge or otherwise change consolidate itself or any of its Subsidiaries with any other Person, except for transactions among its wholly owned Subsidiaries, or (B) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the organizational documents of SellerCompany or its Subsidiaries;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of $1,000,000, or acquire any business or entity (whether by merger or consolidation, by purchase of substantially all assets or equity interests or by any other manner), in each case, in any transaction or series of related transactions, other than acquisitions or other transactions pursuant to Contracts to which the Company or any of its Subsidiaries are a party that are in effect as of the date of this Agreement;
(iv) sell, lease, license or otherwise dispose of any of its material assets or properties (other than Intellectual Property of the Company), except (A) authorizefor sales, leases, licenses or other dispositions in the ordinary course of business and (B) for sales, leases, licenses or other dispositions of assets and properties with a fair market value not in excess of $1,000,000 in the aggregate or (C) pursuant to Contracts to which the Company or any of its Subsidiaries are a party that are in effect as of the date of this Agreement;
(v) except pursuant to awards granted under the Stock Plan, issue, sell sell, grant or transfer authorize the issuance, sale or grant of any membership interests shares of capital stock or other securities of Sellerthe Company or any of its Subsidiaries (other than issuances by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company), or any options, warrants, convertible securities, subscription rights or other similar rights entitling its holder to receive or acquire any shares of such capital stock or other securities of the Company or any of its Subsidiaries;
(Bvi) adjustreclassify, split, combine combine, subdivide, redeem or reclassify repurchase, any of capital stock of the Company or otherwise amend options, warrants or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except in connection with the terms net exercise or settlement of any membership interest or other security of Seller, awards under the Stock Plan;
(Cvii) declare, authorizeset aside, set aside make or pay any dividend or other distribution (whether distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or other property) or (D) enter into any agreement with respect to the voting of any equity of Sellerits capital stock;
(ivviii) (A) merge make any material loans, advances, guarantees or consolidate with capital contributions to or investments in any other Person, acquire any business or assets of any other Person (whether by merger, stock purchase, asset purchase other than the Company or other business combinationany direct or indirect wholly owned Subsidiary of the Company), other than the purchase of supplies in the Ordinary Course of Business or (B) form any new Subsidiary;
(v) (A) materially change the operation of the Business, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line ordinary course of business;
(vi) make any loans, advances or capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of Business);
(vii) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on or otherwise encumber any Assets, other than in the Ordinary Course of Business;
(ix) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur any Indebtedness for borrowed money or guarantee any such Indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt securities security of Seller the Company or assumeany of its Subsidiaries, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person except for Indebtedness for borrowed money incurred in the ordinary course of business consistent with past practice, not to exceed $500,000 in the aggregate;
(x) make or commit to make capital obligationsexpenditures other than in an amount not in excess of $500,000, in the case aggregate, other than any capital expenditure (or series of related capital expenditures) consistent in all material respects with the Company’s annual capital expenditure budget for periods following the date hereof made available to Parent;
(xi) enter into any Contract that would have been a Company Material Contract had it been entered into prior to the date of this Agreement, other than in the foregoingordinary course of business;
(xii) cancel amend or modify in any debts owed to material respect or terminate any Company Material Contract, or waive or release any material rights, claims held by Seller or benefits under any Company Material Contract, in excess each case, other than in the ordinary course of $35,000business;
(xiii) abandonmake any material changes with respect to its accounting policies or procedures, disclaim, dedicate to the public, sell, assign except as required by changes in Law or grant any security interest in, to or under any Business Intellectual Property or Business IP AgreementGAAP;
(xiv) disclose settle any confidential Proceeding, except in the ordinary course of business or proprietary information where such settlement is covered by insurance or confidential Business Intellectual Property to any Person, other involves only the payment of monetary damages in an amount not more than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with $500,000 in the Selleraggregate;
(xv) revalue file any of the assets of the Sellermaterial amended Tax Return, except as required by GAAP, or enter into, or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contract;
(xvi) (A) change any method of accounting or accounting practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Business;
(xvii) make, revoke or change any material Tax election in a manner inconsistent with past practice, adopt or change any material Tax accounting method or period, enter into any agreement with a Governmental Entity with respect to material Taxes, settle or compromise any examination, audit or other action with a Governmental Entity of or relating to any material Taxes or settle or compromise any claim or assessment by Seller a Governmental Entity in respect of material Taxes, or enter into any Tax sharing or similar agreement (excluding any commercial contract not primarily related to Taxes), in each case, to the extent such action could reasonably be expected to have any adverse and material impact on Parent following the Closing;
(xvi) except in the ordinary course of business or pursuant to the terms of any Company Benefit Plan in effect as of the date of this Agreement or as required by Law, (A) materially increase the annual salary or consulting fees or target annual cash bonus opportunity, of any Company Employee with an annual salary or consulting fees and target annual cash bonus opportunity in excess of $250,000 as of the date of this Agreement, (B) become a party to, establish, adopt, materially amend, or terminate any material Company Benefit Plan or any arrangement that could adversely impact would have been a material Company Benefit Plan had it been entered into prior to this Agreement, (C) take any action to accelerate the amount vesting or lapsing of Taxes due restrictions or payable payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Benefit Plan, (and/or D) forgive any direct loans or indirect owner issue any loans (other than routine travel advances issued in the ordinary course of equity interests business) to any Company Employee, (E) hire any employee or engage any independent contractor (who is a natural person) with annual salary or consulting fees and target annual cash bonus opportunity in Buyerexcess of $250,000 or (F) after terminate the Closing Dateemployment of any executive officer other than for cause;
(xvii) sell, assign, lease, exclusively license, pledge, encumber, divest, abandon, allow to lapse or expire any material Intellectual Property of the Company, other than grants of non-exclusive licenses in the ordinary course of business to customers for use of the products or services of the Company or otherwise in the ordinary course of business;
(xviii) modifybecome a party to, amend establish, adopt, amend, commence participation in or terminate (other than pursuant to the expiration of its term other than as a result of enter into any action taken by Seller, collective bargaining or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunderlabor union Contract;
(xix) fail to pay use commercially reasonable efforts to keep current and in full force and effect, or to comply with the requirements of, or to apply for or renew, any required maintenance permit, approval, authorization, consent, license, registration or other similar fees or otherwise fail certificate issued by any Governmental Entity that is material to make required filings or payments required to maintain the conduct of the business of the Company and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandonits Subsidiaries, let lapse or fail to protect any Owned Intellectual Propertytaken as a whole;
(xx) commence, settle file any prospectus supplement or compromise registration statement or consummate any Proceedingoffering of securities that requires registration under the Securities Act or that includes any actual or contingent commitment to register such securities under the Securities Act in the future;
(xxi) cancel, materially reduce or fail to maintain maintain, cancel or materially change coverage under, in a manner materially detrimental to the Company or any of its Subsidiaries, any insurance policypolicy maintained with respect to the Company and its Subsidiaries and their assets and properties;
(xxii) change or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in enter into any material respect or fail to pay or delay payment new line of payables or other Liabilities in any material respect;business outside of the business currently conducted by the Company and its Subsidiaries as of the date of this Agreement; or
(xxiii) engage in agree or authorize to do any transaction with any Related Parties; or
(xxiv) authorize or enter into any agreement, commitment or understanding (whether written or oral) with respect to of the foregoing.
Appears in 1 contract
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth on the Company Disclosure Schedule or as agreed to by Infor (which agreement, other than in the case of clauses (b), (c), (d), (e), (f), (g), (k), (l), (o), (q), (r), (s), (v) and (aa) below (and clause (bb) below, to the extent relating to any of the foregoing items), shall not be unreasonably withheld or delayed), the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) From the date hereof until the earlier business and operations of the Closing or termination of this Agreement, Seller Company and its subsidiaries shall (i) operate the Business be conducted only in the Ordinary Course ordinary course of Business, including maintaining appropriate service levels, business and in compliance with applicable Law including any COVID-19 Measures; the Company and (ii) its subsidiaries shall use commercially their reasonable efforts to (A) maintain preserve intact their current business organizations, keep available the services of their current officers and employees and preserve intact the business organization and goodwill of the Business, the Assets and the Assumed Liabilities, (B) maintain satisfactory their relationships with Seller’s clients, operators, distributors, their material customers, insurance underwriters suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with Seller, (C) pay its debts them and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available preserve the services of, the Business Employees.goodwill of their respective businesses;
(b) Without limiting the generality Company shall not (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the foregoingcapital stock of any of its subsidiaries, any other securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including without limitation stock appreciation rights or phantom interests), except for (A) issuances of Common Shares upon the exercise of Options and Warrants outstanding as set forth in Section 5.1(b) of the Disclosure Schedule, as expressly permitted by this Agreement or as approved in writing by ▇▇▇▇▇, from the date hereof until and (B) issuances of Common Shares pursuant to the earlier Purchase Plan or the DSIP or (ii) repurchase, redeem or otherwise acquire, or permit any of its subsidiaries to repurchase, redeem or otherwise acquire, any shares of capital stock or other equity interests of the Closing Company or any of its subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the termination Company or any of this Agreement, Seller its subsidiaries);
(c) the Company shall not take any action which would require disclosure on Section 2.8 of the Disclosure Schedule or:
(i) take sell, transfer or omit pledge, or agree to take sell, transfer or pledge, any action that results or may reasonably be expected to result equity interest owned by it in any of the representations and warranties of Seller its subsidiaries or the Beneficial Owners set forth herein being or becoming untrue in any material respect alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of the conditions set forth herein not being satisfied;
any of its subsidiaries, (ii) amend or otherwise change the its articles of incorporation or bylaws or permit any of its subsidiaries to amend its articles of incorporation, bylaws or equivalent organizational documents of Seller;
or (iii) (A) authorize, issue, sell or transfer any membership interests or other securities of Seller, (B) adjust, split, combine or reclassify any shares of its capital stock, and shall not permit any of its subsidiaries to split, combine or otherwise amend reclassify any shares of its capital stock;
(d) the terms Company shall not, and shall not permit any of any membership interest or other security of Sellerits subsidiaries to, (C) declare, authorize, set aside make or pay any dividend or other distribution dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned subsidiaries to the Company);
(e) neither the Company nor any of its subsidiaries shall (i) grant or agree to any increase in any manner the compensation or fringe benefits of, or pay any bonus to, any current or former director, officer or employee except (A) for increases and bonuses expressly contemplated by or required under existing employment agreements and bonus plans, (B) for increases in compensation to employees in the ordinary course of business consistent with past custom and practice, (C) in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans and (D) as set forth in Section 5.01(e) of the Company Disclosure Schedule, (ii) enter into any new or materially amend any existing employment, consulting, severance, termination, change-of-control or indemnification agreement with respect to the voting of any equity of Seller;
(iv) (A) merge current or consolidate with any other Personformer director, acquire any business officer or assets of any other Person (whether by merger, stock purchase, asset purchase or other business combination), other than the purchase of supplies in the Ordinary Course of Business or (B) form any new Subsidiary;
(v) (A) materially change the operation employee of the BusinessCompany, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, (iii) except such changes as may be required to comply with any applicable Law and except as provided or the terms of otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend, modify or terminate any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof or (Biv) enter into a new line except as may be required to comply with applicable Law and except as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), pay any benefit not required by any plan or arrangement as in effect as of business the date hereof (including, without limitation, the granting of, acceleration of, exercisability of or abandon vesting of stock options, stock appreciation rights or discontinue an existing line restricted stock, except as otherwise contemplated by this Agreement), except in connection with accelerating the vesting schedules of businessthe Options and terminating the Options and the Stock Plans and except for the payment of the employer match under the Company’s 401(k) plan;
(vif) the Company shall not, and shall not permit any of its subsidiaries to, acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof;
(g) the Company shall not, and shall not permit any of its subsidiaries to, sell, lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of, or agree to sell, lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of, any of its properties or assets other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets), (iii) inventory in the ordinary course of business consistent with past practice, (iv) in the ordinary course of business, including without limitation, the grant of licenses by the Company to customers for such customers’ use of the Company’s products and services and (v) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with U.S. generally accepted accounting principles;
(h) the Company shall not, and shall not permit any of its subsidiaries to, incur, assume or pre-pay any indebtedness for borrowed money or enter into any agreement to incur, assume or pre-pay any indebtedness for borrowed money, or guarantee, or agree to guarantee, any such indebtedness or obligation of another person, or issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing;
(i) the Company shall not, and shall not permit any of its subsidiaries to, make or forgive any loans, advances or capital contributions to, guarantees for the benefit of, or investments in, any Person person or entity, other than loans or capital contributions between or among the Company and any of its wholly-owned subsidiaries and cash advances to the Company’s or any such subsidiary’s employees for reimbursable travel and other business expenses incurred in the ordinary course of business consistent with past practice;
(j) the Company shall not, and shall not permit any of its subsidiaries to, assume, guarantee or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except for the obligations of the subsidiaries of the Company permitted under this Agreement;
(k) neither the Company nor any of its subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its subsidiaries (other than advances of expenses to Business Employees in the Ordinary Course of Businessany transaction specifically contemplated by this Agreement);
(viil) (A) institute or announce the Company shall not, and shall not permit any increase in the compensation, bonuses or other benefits payable to any Business Employeesof its subsidiaries to, (Bi) enter into, amend or waive materially amend, modify or supplement any rights under any employment, consulting, severance or change Material Contract outside the ordinary course of control agreement business consistent with any Business Employeepast practice (except as may be necessary for the Company to comply with its obligations hereunder and except as set forth in item #1 in Section 5.01(l) of the Company Disclosure Schedule), (Cii) grant waive, release, grant, assign or transfer any severance of its material rights or termination pay claims (cash, equity whether such rights or claims arise under a Material Contract or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (Eiii) hire amend, modify or supplement any Business Employee agreement pursuant to which the Company or terminate any of its subsidiaries leases any of the real property required to be disclosed in Section 3.25 of the Company Disclosure Schedule;
(m) the Company shall not, and shall not permit any of its subsidiaries to, authorize or transfer make any Business Employee capital expenditures (other than for causepursuant to commitments prior to the date hereof disclosed in Section 5.01(m) of the Company Disclosure Schedule or otherwise required in the ordinary course of business);
(viiin) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on or otherwise encumber any Assets, other than in the Ordinary Course of BusinessCompany and its subsidiaries shall comply with their obligations under the Material Contracts as such obligations become due;
(ixo) except for customer contracts entered into in the ordinary course of business, the Company shall not, and shall not permit its subsidiaries to, renegotiate or enter into any new license, agreement or arrangement relating to any Intellectual Property, including for any current or new Solution Partner Software;
(p) the Company and its subsidiaries (i) shall continue in force insurance covering risks of such types and in such amounts as are consistent with the Company’s past practices and (ii) shall not permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated;
(q) the Company shall not, and shall not permit any of its subsidiaries to, enter into, amend, modify or supplement any agreement, transaction, commitment or arrangement with any current or former officer, director, employee or other affiliate of the Company or any of its subsidiaries (or any affiliate of any of the foregoing) other than as contemplated by this Agreement and other than employment of employees on an “at-will” basis and other modifications to employee compensation permitted by this Agreement;
(r) the Company shall not, and shall not permit any of its subsidiaries to, establish or acquire (i) any subsidiary other than wholly-owned subsidiaries or (ii) subsidiaries organized outside of the United States and its territorial possessions;
(s) the Company shall not, and shall not permit any of its subsidiaries to, amend, modify or waive any term of any outstanding security of the Company or any of its subsidiaries, except (i) as required by this Agreement, (ii) in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted and (iii) in connection with terminating the Options and the Stock Plans;
(t) the Company shall, and shall cause its subsidiaries to, (i) maintain any real property to which the Company and any of its subsidiaries have a leasehold interest (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition, subject to reasonable wear and tear and subject to any casualty or undertake condemnation, (ii) timely pay all taxes, water and sewage rents, assessments and insurance premiums affecting such real property and (iii) timely comply in all material respects with the terms and provisions of all leases, contracts and agreements relating to such real property and the use and operation thereof;
(u) the Company shall not, and shall not permit any of its subsidiaries to, enter into any labor or commit collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to undertake capital expenditures for or relating to any labor union, except as required by Law;
(v) the purchase Company shall not, and shall not permit any of equipment its subsidiaries to, settle or tangible assets compromise any pending or threatened suit, action, claim or litigation, except with respect to the settlement or compromise of any such matter which does not involve equitable or injunctive relief and does not obligate the Company and its subsidiaries to make aggregate cash payments exceeding $35,000 50,000;
(w) the Company shall not, and shall not permit any of its subsidiaries to, change any of the material accounting policies, practices or procedures (including material tax accounting policies, practices and procedures) used by the Company and its subsidiaries as of the date hereof, except as may be required as a result of a change in the aggregateapplicable Law or in U.S. generally accepted accounting principles;
(x) agree the Company shall not, and shall not permit any of its subsidiaries to, request or adopt (A) revalue in any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with material respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing its assets (A) through (Cincluding, without limitation, writing down or writing off any notes or accounts receivable in any material manner);
(xi) incur any Indebtedness or issue any debt securities or warrants or other rights to acquire debt securities of Seller or assume, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person for Indebtedness or capital obligations, in the case of any of the foregoing;
(xii) cancel any debts owed to or claims held by Seller in excess of $35,000;
(xiii) abandon, disclaim, dedicate to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreement;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;
(xv) revalue any of the assets of the Seller, except as required by GAAPU.S. generally accepted accounting principles;
(y) the Company shall not, or enter into, or and shall not permit any of the assets of the Seller to become bound by any Contract that is its subsidiaries to, make or would constitute a Material Contract;
(xvi) (A) change any material tax election, make or change any material method of accounting or accounting practice, other than changes with respect to Taxes except as may be required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Business;
(xvii) make, revoke or change any Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date;
(xviii) modify, amend or terminate (other than pursuant to the expiration of its term other than as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently change in effect or termination release or assign any material rights or claims thereunder;
(xix) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property;
(xx) commenceapplicable Law, settle or compromise any Proceedingmaterial Tax liability or file any material amended Tax Return;
(xxiz) cancelthe Company shall not, materially reduce and shall not permit any of its subsidiaries to, pay, discharge or fail to maintain satisfy any insurance policyclaims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than (i) the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice of liabilities reflected on or reserved in the financial statements of the Company or incurred in the ordinary course of business and consistent with past practice or (ii) the payment of the Company’s Expenses (as defined herein), including the payment of the fees and expenses of the Special Committee and the costs, fees and expenses incurred by the Special Committee;
(xxiiaa) change or modify the Seller’s creditCompany shall not, collectionand shall not permit any of its subsidiaries to, take, or payment policiesagree or commit to take, procedures any action that would, or practicesis reasonably likely to, including acceleration make any representation or warranty of collections the Company contained in this Agreement inaccurate at, or receivables (whether as of any time prior to, the Effective Time or result in any of the conditions to the Merger set forth in Article 6 not past due) being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or fail to pay or delay payment of payables or other Liabilities in prevent any material respect;such condition from not being satisfied; and
(xxiiibb) engage in the Company shall not, and shall not permit any transaction with of its subsidiaries to, agree or commit to do any Related Parties; or
(xxiv) authorize or enter into any agreement, commitment or understanding (whether written or oral) with respect to of the foregoing.
Appears in 1 contract
Sources: Merger Agreement (Mapics Inc)
Interim Operations. (a) From During the Pre-Closing Period, except (i) as otherwise contemplated by this Agreement, (ii) as set forth in Section 5.2(a) of the Seller Disclosure Schedule, (iii) as Purchaser shall otherwise agree in writing in advance (which consent shall not be unreasonably withheld, delayed or conditioned), (iv) as required by any Contract or Permit which has been disclosed to Purchaser prior to the date hereof until the earlier of the Closing or termination of this Agreement, (v) as required by applicable Law or GAAP or (vi) as required by the COVID-19 Measures, Seller Parent (x) shall (i) operate conduct, and shall cause its Subsidiaries to conduct, the Business only in the Ordinary Course of BusinessCourse, including maintaining appropriate service levels(y) to the extent consistent with clause (x), shall use, and in compliance with applicable Law including any COVID-19 Measures; and (ii) use cause its Affiliates to use, commercially reasonable efforts to (A) maintain and preserve intact the business organization current organization, material assets, Permits (other than Shared Permits) and relationships and goodwill of the Business, the Assets and the Assumed Liabilities, (B) maintain satisfactory relationships with Seller’s clients, operators, distributorskey Business Employees, customers, insurance underwriters suppliers, regulators and other third parties others having material business dealings relationships with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits the Business and (Ez) maintain good relations with, and keep available the services of, the Business Employees.
(b) Without without limiting the generality of the foregoing, except as set forth shall not, and shall cause each of its Subsidiaries not to, in Section 5.1(b) each case in relation to the conduct of the Disclosure Schedule, as expressly permitted by this Agreement or as approved in writing by ▇▇▇▇▇, from the date hereof until the earlier of the Closing or the termination of this Agreement, Seller shall not take any action which would require disclosure on Section 2.8 of the Disclosure Schedule orBusiness:
(i) take sell, pledge, dispose of, grant, transfer, encumber or omit to take authorize the issuance, sale, pledge, disposition, grant, transfer, encumbrance or exercise of any action that results or may reasonably be expected to result in any of the representations and warranties of Seller or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfiedSold Securities;
(ii) amend sell, lease, license, transfer or otherwise change dispose of any (A) Transferred Assets other than Business IP or inventory sold in the organizational documents Ordinary Course; (B) material Business IP or, within the scope of Sellerthe Business, any licensed Business IP, other than non-exclusive licenses granted in the Ordinary Course or abandonment or lapse of Registered Business IP in the Ordinary Course; or (C) Owned Real Property or Leased Real Property;
(iii) acquire any material assets or material business of another Person (whether by merger, consolidation, acquisition of stock or assets or otherwise) other than (A) authorize, issue, sell in the Ordinary Course or transfer any membership interests or other securities of Seller, (B) adjust, split, combine or reclassify or otherwise amend pursuant to existing Contracts in existence on the terms date of any membership interest or other security of Seller, (C) declare, authorize, set aside make or pay any dividend or other distribution (whether in cash, stock or other property) or (D) enter into any agreement with respect this Agreement and provided to the voting of any equity of SellerPurchaser;
(iv) (A) merge amend or consolidate with any other Person, acquire any business or assets propose to amend the Organizational Documents of any other Person (whether by merger, stock purchase, asset purchase or other business combination), other than the purchase of supplies in the Ordinary Course of Business Sold Company or (B) form cause the Sold Company to declare, set aside or pay any new Subsidiarydividend or distribution to any Person (except any such cash dividends or distributions in amounts reasonably necessary to facilitate the elimination of Intercompany Accounts as contemplated by this Agreement);
(v) (A) materially change the operation of the Business, Assets grant or the Assumed Liabilities or permit any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of business;
(vi) make any loans, advances or capital contributions to, or investments in, any Person Encumbrance (other than advances of expenses to Business Employees in the Ordinary Course of Business);
(viiPermitted Encumbrances) (A) institute or announce on any increase in the compensation, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of Transferred Asset or incur any Lien on indebtedness for borrowed money outstanding or otherwise encumber any Assets, other than in the Ordinary Course guarantee for such indebtedness of Business;
(ix) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur any Indebtedness another Person or issue or sell or have outstanding any debt securities or warrants or other rights to acquire any debt securities security of Seller or assume, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person for Indebtedness or capital obligationsSold Company, in each case, that would be an Assumed Liability, except for, in each case, (A) Intercompany Accounts among the case Seller and the Sold Company to be eliminated in accordance with Section 5.20, (B) Indebtedness for borrowed money incurred in the Ordinary Course, (C) indebtedness in replacement of any of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the foregoingindebtedness being replaced or (D) indebtedness that will be repaid or extinguished at or prior to the Closing;
(xiivi) cancel except (A) as required by the terms of the Benefit Plans currently in effect, or (B) as otherwise required by applicable Law, (y) materially increase the compensation or consulting fees, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any debts owed Business Employee, or (z) amend in any material respect any Assumed Plan, in each case, other than (1) changes to Benefit Plans that are not Assumed Plans that are not targeted at Business Employees, (2) changes in connection with any annual renewal or claims held reenrollment of health and welfare plans and (3) annual salary (and corresponding bonus) increases not to exceed 3% in the aggregate for the U.S. (or the applicable country salary increase budget as determined by Seller Parent), individual market-competitive salary adjustments to retain critical talent, and job level promotions due to changes in excess of $35,000individual job responsibilities;
(xiiivii) abandonother than as contemplated by Section 6.1(a), disclaim, dedicate to the public, sell, assign or grant any security interest in, to or under transfer any Business Intellectual Property Employee into or out of the Sold Company, or transfer the employment of any employee to a position in which such employee would no longer be a Business IP AgreementEmployee;
(xivviii) disclose settle any confidential or proprietary information or confidential material Proceeding principally affecting the Business Intellectual Property to any Person, other than employees if the Damages resulting from such waiver, release, assignment settlement or compromise involves solely the payment of Seller that are subject cash and such amount is paid prior to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the SellerClosing;
(xvix) revalue make any of the assets of the Seller, except as required by GAAP, or enter into, or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contract;
(xvi) (A) change in any method of accounting or accounting practice, practice or auditing practice applicable to the Business other than changes required under applicable Law or GAAP (A) as may be initiated by Seller Parent with respect to its business generally or (B) fail as may be appropriate to maintain conform to GAAP or applicable Law;
(x) either (i) accelerate collection of any account receivable relating to the Business in advance of its due date, or (ii) delay payment of any account payable relating to the Business beyond its due date, in each case, with the primary purpose of affecting the calculation of the Estimated Purchase Price to be set forth in the Estimated Closing Statement;
(xi) adopt any partial or complete plan of liquidation, dissolution or winding down with respect to the Sold Company or Seller’s books;
(xii) except as required by applicable Law or as contemplated by this Agreement, accounts and records make or change any material Tax election, adopt or change any method of Tax accounting, amend any Tax Returns or settle any Tax claim, in each case, to the extent such action would both (A) be outside of the Ordinary Course and (B) reasonably be expected to have the effect of Business;
(xvii) make, revoke or change increasing the Tax liability of Purchaser for any Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) period ending after the Closing Date;
(xviiixiii) modifyin each case other than in the Ordinary Course, enter into, amend or modify in any material respect or terminate any Material Contract (other than pursuant or any Contract that would be a Material Contract if entered into prior to the expiration of its term other than as a result of any action taken by Sellerdate hereof) or Transferred Lease, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination otherwise waive, release or assign any material rights rights, claims or claims thereunder;
(xix) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property;
(xx) commence, settle or compromise any Proceeding;
(xxi) cancel, materially reduce or fail to maintain any insurance policy;
(xxii) change or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;
(xxiii) engage in any transaction with any Related Partiesbenefits thereto; or
(xxivxiv) authorize or enter into any agreement, commitment agreement or understanding (whether written or oral) with respect obligation to undertake any of the foregoing.
(b) Nothing contained in this Agreement shall give either Party, directly or indirectly, the right to control or direct the other Party’s operations prior to the Closing Date.
Appears in 1 contract
Interim Operations. (a) From The Company covenants and agrees as to itself and its Subsidiaries that after the date hereof and until the earlier of the Closing or termination of this Agreement pursuant to its terms or the Effective Time (unless otherwise approved in writing by Parent, which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed, and except as otherwise expressly contemplated by this Agreement) and except as required by applicable Laws, Seller the business of the Company and its Subsidiaries shall (i) operate the Business only be conducted in the Ordinary Course of Business, including maintaining appropriate service levels, ordinary and usual course and in compliance accordance with applicable Law including any COVID-19 Measures; past practices and, to the extent consistent therewith, the Company and (ii) its Subsidiaries shall use commercially their respective reasonable best efforts to (A) preserve their business organizations intact and maintain and preserve intact the business organization existing relations and goodwill of the Businesswith Governmental Entities, the Assets and the Assumed Liabilitiescustomers, (B) maintain satisfactory relationships with Seller’s clients, operatorssuppliers, distributors, customerscreditors, insurance underwriters lessors, employees, independent contractors and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, associates and keep available the services of, of the Business Employees.
(b) Company's and its Subsidiaries' present employees and agents. Without limiting the generality of the foregoing, except as set forth foregoing and in Section 5.1(b) of the Disclosure Schedule, as expressly permitted by this Agreement or as approved in writing by ▇▇▇▇▇furtherance thereof, from the date hereof of this Agreement until the earlier of the Closing or the termination of this Agreement pursuant to its terms or the Effective Time, except (A) as otherwise expressly required by this Agreement, Seller shall (B) as the Parent may approve in writing (which approval will not take any action which would require disclosure be unreasonably (being determined based on Section 2.8 of a reasonable acquirer) withheld or delayed), the Disclosure Schedule orCompany will not and will not permit its Subsidiaries to:
(i) take adopt or omit to take propose any action that results change in the Company's or may reasonably be expected to result in any of the representations and warranties its Subsidiary's Articles of Seller Association or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfiedother applicable governing instruments;
(ii) amend merge or otherwise change the organizational documents consolidate itself or any of Sellerits Subsidiaries with any other Person;
(iii) acquire assets from any other Person with a value or purchase price in the aggregate in excess of USD 50,000 (AFifty Thousand United States Dollars) authorizein any transaction or series of related transactions, issue, sell or transfer any membership interests or other securities than acquisitions pursuant to Contracts in effect as of Seller, (B) adjust, split, combine or reclassify or otherwise amend the terms date of any membership interest or this Agreement and set forth in the Company Disclosure Schedule and other security than in the ordinary course of Seller, (C) declare, authorize, set aside make or pay any dividend or other distribution (whether in cash, stock or other property) or (D) enter into any agreement with respect to the voting of any equity of Sellerbusiness;
(iv) (A) merge issue, sell, pledge, dispose of, grant, transfer, encumber, or consolidate with authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of its capital stock or of any its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other Person, rights of any kind or nature whatsoever to acquire any business shares of such capital stock or assets of such convertible or exchangeable securities, including (without limitations) any other Person (whether by merger, stock purchase, asset purchase or other business combination), options pursuant to the Company ESOPs other than the purchase issuance of supplies Company Shares pursuant to the exercise of Vested Options, and other than has been agreed upon in writing by the Ordinary Course of Business or (B) form any new SubsidiaryParties;
(v) (A) materially change the operation create or incur any Lien on any of the Business, Assets or the Assumed Liabilities its assets or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of businessits Subsidiaries;
(vi) make any loans, advances or capital contributions to, to or investments in, in any Person (other than between the Company and its Subsidiaries) except for travel advances of expenses to Business Employees in the Ordinary Course of Business)ordinary course and excluding cash management consistent with past practice;
(vii) (A) institute declare, set aside, make or announce pay any increase in the compensation, bonuses dividend or other benefits distribution, payable in cash, stock, property or otherwise, with respect to any Business Employees, (B) of its capital stock or enter into, amend or waive into any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) respect to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause)the voting of its capital stock;
(viii) transferreclassify, leasesplit, licensecombine, guaranteesubdivide or redeem, sell, mortgage, pledge, dispose of or incur any Lien on purchase or otherwise encumber acquire, directly or indirectly, any Assets, other than in the Ordinary Course of Businessits capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock;
(ix) acquire incur any real property indebtedness for borrowed money or undertake or commit to undertake capital expenditures for the purchase guarantee such indebtedness of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become dueanother Person, or (D) any other thing under any applicable Law relating to bankruptcy issue or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur any Indebtedness or issue sell any debt securities or warrants or other rights of any kind or nature whatsoever to acquire any of its debt securities of Seller or assume, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person for Indebtedness or capital obligations, in the case of any of its Subsidiaries, except for: (A) indebtedness for borrowed money incurred in the foregoingordinary course of business consistent with past practices not to exceed USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, or (B) guarantees incurred in compliance with this Section 6.1 by it of indebtedness of its wholly-owned Subsidiaries;
(x) make or authorize any capital expenditure, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individually, and except for capital expenditures in the ordinary course of business consistent with past practices;
(xi) make any changes with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles or applicable Law;
(xii) cancel settle any debts owed to litigation or claims held by Seller other proceedings before a Governmental Entity other than a settlement reimbursable from insurance including a full release of the Company and its affiliates, as applicable and other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually or USD50,000 (Fifty Thousand United States Dollars) in excess of $35,000the aggregate;
(xiii) abandonother than as required by Law, disclaimmake any material Tax election or make any application with any Governmental Entity or, dedicate to except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns in the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreementordinary course of business;
(xiv) disclose transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any confidential of its assets, product lines or proprietary information businesses or confidential Business Intellectual Property to of its Subsidiaries, including capital stock of any Personof its Subsidiaries and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement Contracts in effect as of the date of this Agreement and other than for licenses, distribution or similar agreements with customers (directly or indirectly) entered into in the Sellerordinary course of business;
(xv) revalue any of the assets of the Seller, except as required by GAAPapplicable Law or any Contract or existing benefit plan existing as of the date hereof, (i) grant or provide any severance or termination payments or benefits to any of its or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its Subsidiaries, except in the ordinary course of business consistent with past practice, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or enter intomake any new equity awards to any of its or its Subsidiaries' directors, executive officers or any employee or independent contractor or of any of its Subsidiaries, excluding bonuses or salary increases to up to 20 Employees (to which the Company is required) up to an aggregate annualized amount of $200,000, (iii) establish, adopt, amend or terminate any of its benefit plans or amend the terms of any outstanding equity-based awards (except for suspension of exercise of options), (iv) take any action to accelerate the vesting or payment, or permit fund or in any other way secure the payment, of compensation or benefits under any of its benefit plans, to the assets extent not already provided in any such benefit plans, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to any of the Seller to become bound by its or of any Contract that is of its Subsidiaries' directors, officers, employees or would constitute a Material Contractindependent contractors;
(xvi) (A) change take any method action or omit to take any action that might result in any of accounting or accounting practice, other than changes required under applicable Law or GAAP or (B) fail the conditions to maintain the Seller’s books, accounts and records Merger set forth in the Ordinary Course of BusinessArticle VII not being satisfied;
(xvii) maketake any action, revoke or change agree to make any Tax election by Seller that could adversely impact action, which, under applicable law or under the amount Company's past practice, would require the approval or consent of Taxes due or payable (the Company's board of directors and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date;shareholders; or
(xviii) modifyagree, amend authorize or terminate commit to do any of the foregoing.
(b) Without derogating from the provisions of Section 6.1(a) above, the Company shall, prior to making any written or oral communications to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement or the other than pursuant Transaction Documents, provide Parent with a copy of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the expiration extent reasonable under the circumstances), and the Parties hereto shall cooperate in providing any such mutually agreeable communication.
(c) It is agreed and acknowledged that the provisions of its term other than this Section 6.1 shall not serve as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunder;
(xix) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property;
(xx) commence, settle or compromise any Proceeding;
(xxi) cancel, materially reduce or fail to maintain any insurance policy;
(xxii) change or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;
(xxiii) engage in any transaction with any Related Parties; or
(xxiv) authorize or enter into any agreement, commitment or understanding (whether written or oral) basis with respect to the foregoingcontinued operations of the Surviving Corporation following the Effective Time.
Appears in 1 contract
Sources: Merger Agreement (Nice Systems LTD)
Interim Operations. (a) From the date hereof until the earlier of the Closing or termination of this Agreement, Seller shall (i) operate the Business only in the Ordinary Course of Business, including maintaining appropriate service levels, and in compliance with applicable Law including any COVID-19 Measures; and (ii) use commercially reasonable efforts to (A) maintain and preserve intact the business organization and goodwill of the Business, the Assets and the Assumed Liabilities, (B) maintain satisfactory relationships with Seller’s clients, operators, distributors, customers, insurance underwriters and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services of, the Business Employees.
(b) Without limiting the generality of the foregoing, except Except as set forth in Section 5.1(b) 3.1 of the Western Disclosure ScheduleLetter, Western covenants and agrees as expressly permitted by this Agreement or as approved in writing by ▇▇▇▇▇to itself and the Transferred Subsidiaries that, from after the date hereof until the earlier of and prior to the Closing or the termination of (unless Protection One shall otherwise approve in writing, and except as otherwise expressly contemplated by this Agreement, Seller shall not take any action which would require disclosure on Section 2.8 the Stock Option Agreement and the Option and Voting Agreement):
(a) the businesses of the Disclosure Schedule or:Transferred Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, Western shall cause the Transferred Subsidiaries to use all reasonable efforts to preserve their respective business organizations intact and maintain their respective existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, employees and business associates;
(b) neither Western nor any of its Subsidiaries shall (i) take issue, sell, pledge, dispose of, encumber or omit accelerate, modify, or amend the terms of any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to take acquire, any action that results or may reasonably be expected to result shares of any capital stock in any of the representations and warranties of Seller or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfied;
Transferred Subsidiary; (ii) amend the certificate of incorporation or otherwise change the organizational documents by-laws of Seller;
any Transferred Subsidiary; (iii) (A) authorize, issue, sell or transfer any membership interests or other securities of Seller, (B) adjust, split, combine or reclassify or otherwise amend the terms outstanding shares of capital stock of any membership interest or other security of Seller, Transferred Subsidiary; (Civ) declare, authorize, set aside make or pay any dividend or other distribution (whether payable in cash, stock or other property) or (D) enter into any agreement with property in respect to the voting of any equity capital stock of Seller;
(iv) (A) merge WestSec or consolidate with any other Person, acquire any business or assets of any other Person (whether by merger, stock purchase, asset purchase or other business combination), other than the purchase of supplies in the Ordinary Course of Business or (B) form any new Subsidiary;
Westar Security; (v) (A) materially change the operation repurchase, redeem or otherwise acquire, or permit any of the Businessits Subsidiaries to purchase or otherwise acquire, Assets or the Assumed Liabilities any shares of capital stock of any Transferred Subsidiary or any method securities convertible into or exchangeable or exercisable for any shares of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with capital stock of any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of business;
Transferred Subsidiary; (vi) make any loans, advances or capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course ordinary and usual course of Business);
(vii) (A) institute or announce any increase in the compensationbusiness, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on or otherwise encumber any Assetsother property or assets, real, personal or mixed (including, without limitation, leasehold interests and intangible assets and capital stock of any Transferred Subsidiary) of any Transferred Subsidiary or permit any 39 Transferred Subsidiary to incur or modify any material indebtedness or other than liability; or (vii) permit any Transferred Subsidiary to make or authorize or commit for any capital expenditures or, by any means, permit any Transferred Subsidiary to make any acquisition of, or investment in, assets or stock of any other Person or entity, except for (A) acquisitions of security monitoring accounts in the Ordinary Course ordinary course of Business;
business consistent with past practice, (ixB) acquire any real property or undertake or commit other acquisitions of security monitoring accounts not to undertake exceed $5,000,000 in the aggregate and (C) other capital expenditures for the purchase of equipment or tangible assets exceeding not to exceed $35,000 500,000 in the aggregate;
(xc) agree toneither Western nor any of its Subsidiaries shall terminate, request establish, adopt, enter into, make any new grants or adopt (A) awards under, amend or otherwise modify, any moratorium Compensation and Benefit Plans or suspension of payment increase the salary, wage, bonus or other compensation of any Indebtednessemployees of any Transferred Subsidiary except grants, awards or increases occurring in the ordinary and usual course of business (B) the appointment of a receiverwhich shall include normal periodic performance reviews and related compensation and benefit grants, administrator, liquidator, assignee, trustee awards or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (Cincreases);
(xid) incur neither Western nor any Indebtedness of its Subsidiaries shall settle or issue compromise any debt securities material claims or warrants or other rights to acquire debt securities of Seller or assumelitigation involving any Transferred Subsidiary or, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person for Indebtedness or capital obligations, except in the case ordinary and usual course of any of the foregoing;
(xii) cancel any debts owed to or claims held by Seller in excess of $35,000;
(xiii) abandon, disclaim, dedicate to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreement;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;
(xv) revalue any of the assets of the Seller, except as required by GAAP, or enter into, or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contract;
(xvi) (A) change any method of accounting or accounting practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Business;
(xvii) make, revoke or change any Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date;
(xviii) business modify, amend or terminate (other than pursuant any material Contracts to the expiration of its term other than as which a result of any action taken by SellerTransferred Subsidiary is party or waive, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunderof any Transferred Subsidiary;
(xixe) fail neither Western nor any of its Subsidiaries shall make any Tax election with respect to pay Taxes payable by any required maintenance Transferred Subsidiary or other similar fees permit any insurance policy naming any Transferred Subsidiary as a beneficiary or otherwise fail loss- payable payee to make required filings be cancelled or payments required to maintain terminated except in the ordinary and further prosecute any applications for registration usual course of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Propertybusiness;
(xxf) commenceneither Western nor any of its Subsidiaries shall take any action or omit to take any action that would cause any of its representations and warranties herein to become untrue in any material respect; and
(g) neither it nor any of its Subsidiaries will authorize or enter into an agreement to do any of the fore going.
(h) the business of Protection One and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, Protection One and its Subsidiaries shall use all reasonable efforts to preserve their respective business organizations intact and maintain their respective existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, employees and business associates;
(i) neither Protection One nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose of, encumber or accelerate, modify, or amend the terms of any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of any capital stock of Protection One or any of its Subsidiaries; (ii) amend the certificate of incorporation or by-laws of Protection One or any of its Subsidiaries; (iii) split, combine or reclassify the outstanding shares of capital stock of Protection One or any of its Subsidiaries; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock other than dividends from Protection One's direct or indirect wholly-owned Subsidiaries and the dividend and other distributions referred to in the recitals to this Agreement; or (v) repurchase, redeem or otherwise acquire any shares of capital stock or any securities convertible into or exchangeable or exercisable for any shares of capital stock of Protection One or any of its Subsidiaries; (vi) other than in the ordinary and usual course of business, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any other property or assets, real, personal or mixed (including, without limitation, leasehold interests and intangible assets and (including capital stock of any of Protection One's Subsidiaries) or incur or modify any material indebtedness or other liability; or (vii) make or authorize or commit for any capital expenditures or, by any means, make any acquisition of, or investment in, assets or stock of any other Person or entity, except for
(A) acquisitions of security monitoring accounts in the ordinary course of business consistent with past practice, (B) other acquisitions of security monitoring accounts not to exceed $5,000,000 in the aggregate and (C) other capital expenditures not to exceed $500,000 in the aggregate;
(j) neither Protection One nor any of its Subsidiaries shall terminate, establish, adopt, enter into, make any new grants or awards under, amend or otherwise modify, any Protection One Compensation and Benefit Plans or increase the salary, wage, bonus or other compensation of any employees except grants, awards or increases occurring in the ordinary and usual course of business (which shall include normal periodic performance reviews and related compensation and benefit grants, awards or increases) except for the bonuses referred to in the recitals to this Agreement;
(k) neither Protection One nor any of its Subsidiaries shall settle or compromise any Proceedingmaterial claims or litigation or, except in the ordinary and usual course of business modify, amend or terminate any of its material Contracts or waive, release or assign any material rights or claims;
(xxil) cancel, materially reduce neither Protection One nor any of its Subsidiaries shall make any Tax election or fail to maintain permit any insurance policypolicy naming it as a beneficiary or loss-payable payee to be cancelled or terminated except in the ordinary and usual course of business;
(xxiim) change neither Protection One nor any of its Subsidiaries shall take any action or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration omit to take any action that would cause any of collections or receivables (whether or not past due) in any material respect or fail its representations and warranties herein to pay or delay payment of payables or other Liabilities become untrue in any material respect;; and
(xxiiin) engage in neither Protection One nor any transaction with any Related Parties; or
(xxiv) of its Subsidiaries will authorize or enter into an agreement to do any agreement, commitment or understanding (whether written or oral) with respect to of the foregoing.
Appears in 1 contract
Sources: Contribution Agreement (Protection One Alarm Monitoring Inc)
Interim Operations. (a) From the date hereof until the earlier of the Closing Except as otherwise required by Law or termination of expressly required by this Agreement, each Seller shall agrees, from the date it becomes a Party hereto until the Closing, to use its best efforts to cause the Company and its Subsidiaries (solely to the extent that such Seller (directly or through its Subsidiary) (i) operate has a right to vote for or against the Business only taking or not taking of any such action, either as a shareholder or through one or more representatives appointed to the board of directors or similar governing or advisory body of the Company or a Company Subsidiary, (ii) has a veto, consent or other right pursuant to the Company Shareholders Agreement, alone or together with the other Sellers then party hereto, to cause any such action to be taken or not taken or (iii) with respect to shareholder or board meetings of the Company or any Company Subsidiary, has the right at such meeting to speak in favor of or against the Company or a Company Subsidiary taking the course of action contemplated by this Section 6.1(a) without unreasonably disrupting such meeting (clause (i) through clause (iii) “Specified Rights”)) to (w) conduct their respective businesses in the Ordinary Course ordinary course of Businessbusiness, including maintaining appropriate service levels, on an arms-length basis and in compliance in all material respects with applicable Law including any COVID-19 Measures; Law, (x) comply with all Covered Laws and (iiy) use commercially reasonable their respective best efforts to (A) preserve their business organizations intact and maintain and preserve intact the business organization existing relations and goodwill of the Businesswith Governmental Authorities, the Assets and the Assumed Liabilitiescustomers, (B) maintain satisfactory relationships with Seller’s clients, operatorssuppliers, distributors, customerscreditors, insurance underwriters lessors, employees and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, associates and keep available the services ofof their present employees and agents and (z) make all filings and other submissions required to be made by the Company and its Subsidiaries with the CVM, the Business Employees.
(b) United States Securities and Exchange Commission or other Governmental Authorities in compliance with Law and on a timely basis. Without limiting the generality of of, and in furtherance of, the foregoing, except as set forth in Section 5.1(b) of the Disclosure Schedule, as expressly permitted by this Agreement or as approved in writing by ▇▇▇▇▇each Seller agrees, from the date hereof it becomes a Party hereto until the earlier of Closing, (solely to the Closing extent that such Seller has (directly or the termination of through its Subsidiary) Specified Rights with respect to such matter) to (except as otherwise required by Law, or expressly required by this Agreement, Seller or approved by Buyer, it being understood that if a notice requesting such approval is made to Buyer and Buyer does not respond to such notice within 5 Business Days of receipt thereof, such non-response shall not take any action which would require disclosure on Section 2.8 be deemed approval of the Disclosure Schedule or:matter referred to in such notice) use its best efforts to cause the Company and each Company Subsidiary not to (in each case, except in the ordinary course of business where not material to the Company and its Subsidiaries):
(i) take amend or omit propose to take amend any action that results or may reasonably be expected to result in any governing document of the representations and warranties of Seller Company or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfiedCompany Subsidiary;
(ii) amend merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among Wholly-Owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise change the organizational documents of Sellerenter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) (A) authorize, issue, sell sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer or encumbrance of, any membership interests shares of capital stock of the Company or of the Company Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, except in connection with the Company’s employee benefits plans and stock option plans;
(iv) redeem, purchase or acquire or offer to redeem, purchase or acquire, directly or indirectly, any shares of its capital stock or any securities convertible into or exchangeable for any shares of Seller, its capital stock;
(Bv) adjust, split, combine or reclassify any outstanding shares of its capital stock (or otherwise amend the terms any securities convertible into or exchangeable for any shares of any membership interest or other security of Seller, its capital stock);
(Cvi) declare, authorize, set aside make or pay any dividend or other distribution (whether payable in cash, stock, property or otherwise with respect to shares of its capital stock (except (A) as required by Law or other propertythe Company’s by-laws, the by-laws of a Company Subsidiary in existence on the date hereof or the Company Shareholders Agreement as amended through the Buyer Initial Offer Submission Date, (B) with respect to dividends and distributions by any direct or indirect Wholly-Owned Subsidiary of the Company to either the Company or (C) cash dividends made pursuant to and in compliance with Section 2.10) or (D) enter into any agreement with respect to the voting of any equity its capital stock, it being understood that the Company is not able to decide on the distribution of Seller;
(iv) (A) merge or consolidate with any other Person, acquire any business or assets dividends by certain Company Subsidiaries pursuant to the shareholders agreements of any other Person (whether by merger, stock purchase, asset purchase or other business combination), other than the purchase of supplies such Subsidiaries set forth in the Ordinary Course of Business or (B) form any new Subsidiary;
(v) (A) materially change the operation of the Business, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of business;
(vi) make any loans, advances or capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of BusinessSchedule 4.2(a)(ii);
(vii) (A) institute make any loans, advances, guarantees or announce capital contributions to or investments in any increase in the compensation, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee Person (other than for cause);
(viiithe Company or any direct or indirect Wholly-Owned Subsidiary of the Company) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose in excess of or incur any Lien on or otherwise encumber any Assets, other than in the Ordinary Course of Business;
(ix) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 R$10 million in the aggregate;
(xviii) agree toexcept as set forth in Section 6.1(a)(viii) of Schedule 6.1(a), request incur any indebtedness for borrowed money or adopt guarantee any such indebtedness of another Person (A) any moratorium other than a direct or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing indirect Subsidiary of the inability of Seller to pay its debts as they become dueCompany), or (D) any other thing under any applicable Law relating to bankruptcy issue or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur any Indebtedness or issue sell any debt securities securities, or warrants or other rights to acquire any debt securities security, of Seller the Company or assumeany of its Subsidiaries, guarantee or endorse, as an accommodation or otherwise, other than for (A) the obligations incurrence by the Company and its Subsidiaries of any Person indebtedness for Indebtedness or capital obligations, borrowed money in the case ordinary course of business in an amount not to exceed R$50 million in the aggregate, (B) the incurrence by the Company and its Subsidiaries of indebtedness for borrowed money on the most favorable market terms reasonably available to the Company or such Company Subsidiary and consistent with the indebtedness being replaced, or (C) guarantees of indebtedness for borrowed money of Subsidiaries of the Company;
(ix) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its material assets, licenses, operations, rights, product lines, properties, businesses or interests therein (including capital stock of any of its subsidiaries), except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of R$5 million in any single transaction or series of related transactions, other than pursuant to Contracts in effect prior to the foregoingdate hereof;
(x) except as set forth in Section 6.1(a)(x) of Schedule 6.1(a), acquire outside of the ordinary course of business (including by merger, exchange, consolidation, acquisition of stock or assets or otherwise) any material assets, or any corporation, partnership, joint venture, limited liability company or other business organization (or division or material assets thereof), in any single transaction or series of related transactions in excess of R$50 million;
(xi) enter into any transaction with any Insider (other than any employment or consulting engagement arrangements with customary and arm’s-length terms entered into in the ordinary course of business);
(xii) cancel any debts owed or waive any claims or rights of material value except for cancellations made or waivers granted to or claims held by Seller any Person other than an Insider in excess the ordinary course of $35,000business which, in the aggregate, are not material;
(xiii) abandonconclude or agree to any material corrective actions, disclaimplans, dedicate to the publicconsent decrees, sell, assign actions or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreementorders;
(xiv) disclose initiate, settle, compromise or waive any confidential or proprietary information or confidential Business Intellectual Property rights relating to any Personmaterial litigation or arbitration matters or other proceedings before a Governmental Authority or any other Person (A) for amounts in excess of R$50 million or (B) with respect to settlements, other than employees of Seller that are subject to a confidentiality compromises or waivers, where such settlement, compromise or waiver imposes non-disclosure covenant protecting against further disclosure thereof monetary restrictions, obligations or to other contractors penalties on the Company or representatives any Company Subsidiary or would materially damage the reputation of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the SellerCompany or any Company Subsidiary;
(xv) revalue make any of the assets of the Sellerchanges with respect to accounting policies or procedures, except as required by changes in Law or Brazilian GAAP, or enter into, or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contract;
(xvi) except as set forth in Section 6.1(a)(xvi) of Schedule 6.1(a), (A) change materially increase the compensation or benefits of any method directors, officers or employees of accounting the Company or accounting practiceany of the Company Subsidiaries, (B) enter into, modify or terminate any employment, severance or similar Contract with any directors, officers or employees of the Company or any of the Company Subsidiaries, other than changes required under applicable Law or GAAP employment agreements terminable at will or (BC) fail take any action to maintain accelerate the Seller’s books, accounts and records in the Ordinary Course vesting or lapsing of Businessrestrictions or payment;
(xvii) make, revoke make or change any (A) material Tax election by Seller that could adversely impact election, accounting method, principle or practice from those utilized in the amount preparation of Taxes due the latest Tax Returns , (B) settlement or payable final resolution of any Tax controversy or (and/or C) amendment to any direct or indirect owner of equity interests in Buyer) after the Closing DateTax Return;
(xviii) take any action that would (or fail to take any action where such failure would), individually or in the aggregate, result in or reasonably be likely to result in any of the conditions in this Agreement set forth in Article VII not being satisfied; or
(xix) enter into or propose to enter into, or modify or propose to modify, amend any Contract which obligates or terminate would obligate the Company or any Company Subsidiary to take any of the actions set forth in this Section 6.1(a). It is understood and agreed that to the extent a Seller has exercised all of the Specified Rights available to it or its Subsidiary in connection with a matter covered by this Section 6.1(a) in furtherance of its obligation to use best efforts to cause the Company and/or its Subsidiaries to take (other than or, as applicable, not take) an action pursuant to this Section 6.1(a), and the expiration Company or such Company Subsidiary nonetheless takes an action that such Seller was using its best efforts to cause not to be taken (or the Company or such Company Subsidiary nonetheless does not take an action that such Seller was using its best efforts to cause to be taken), then such Seller shall not be in breach of its term other than obligations under this Section 6.1(a) as a result of the Company or such Company Subsidiary having taken (or, as applicable, not taken) such action.
(b) Each Seller shall use its best efforts to cause the Company and the Company Subsidiaries to, to the extent permissible by Law, and subject to acknowledgment by Buyer that it is restricted in its ability to trade Shares of the Company and its Subsidiaries, promptly notify Buyer of (i) any action taken by Selleremergency involving the Company or any Company Subsidiary, or other than as a result of a (ii) any material breach deviation by the counterparty theretoCompany or any Company Subsidiary from the ordinary course of business or any material change in the operation of the properties of the Company or any Company Subsidiary and (iii) any Contract currently in effect material claims, complaints, investigations or termination release hearings (or assign any material rights or claims thereunder;
(xix) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property;
(xx) commence, settle or compromise any Proceeding;
(xxi) cancel, materially reduce or fail to maintain any insurance policy;
(xxii) change or modify communications indicating that the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past duesame may be contemplated) in any material respect case initiated by any Governmental Authority regarding the Company or fail to pay or delay payment of payables or other Liabilities in any material respect;
(xxiii) engage in any transaction with any Related Parties; or
(xxiv) authorize or enter into any agreement, commitment or understanding (whether written or oral) with respect to the foregoingCompany Subsidiary.
Appears in 1 contract
Sources: Share Purchase Agreement (State Grid Corp of China)
Interim Operations. (a) From The Company shall, and shall cause each of its Subsidiaries to, from and after the date hereof until the earlier execution and delivery of this Agreement and prior to the Closing (unless Purchaser shall otherwise approve in writing (such approval not to be unreasonably conditioned, withheld or termination of this Agreement, Seller shall (i) operate the Business only in the Ordinary Course of Business, including maintaining appropriate service levelsdelayed)), and in compliance with applicable Law including any COVID-19 Measures; and (ii) use commercially reasonable efforts to (A) maintain and preserve intact the business organization and goodwill of the Business, the Assets and the Assumed Liabilities, (B) maintain satisfactory relationships with Seller’s clients, operators, distributors, customers, insurance underwriters and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services of, the Business Employees.
(b) Without limiting the generality of the foregoing, except as set forth in Section 5.1(b) of the Disclosure Schedule, as otherwise expressly required or permitted by this Agreement or as required by applicable Law or requested by a Governmental Authority, conduct its business in all material respects in the Ordinary Course of Business and, to the extent consistent therewith, shall use and cause each of its Subsidiaries to use their respective commercially reasonable efforts to maintain its and its Subsidiaries’ relations and goodwill with key Governmental Authorities, customers, suppliers, licensors, licensees, distributors, creditors, lessors, employees, agents and business associates. Without limiting the generality of and in furtherance of the foregoing sentence, from the execution and delivery of this Agreement until the Closing, except as otherwise expressly required or permitted by this Agreement, required by applicable Law or requested by a Governmental Authority, as approved in writing by ▇▇▇▇▇Purchaser (such approval not to be unreasonably conditioned, from withheld or delayed) or set forth in the date hereof until the earlier corresponding subsection of Section 5.7(a) of the Closing Company Disclosure Letter, neither the Company nor any of its Subsidiaries shall, directly or the termination of this Agreement, Seller shall not take any action which would require disclosure on Section 2.8 of the Disclosure Schedule orindirectly:
(i) take adopt or omit to take propose any action that results or may reasonably be expected to result change in any of the representations and warranties of Seller or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfiedits Organizational Documents;
(ii) amend or otherwise change the organizational documents number of Sellerdirectorships that constitute the Company Board as of the date of this Agreement or present a slate of directors to the Company Shareholders for election that is greater than or fewer than the number of directors that constitute the Company Board as of the date of this Agreement;
(iii) (A) authorizemerge or consolidate the Company or any of its Subsidiaries with any other Person, issueexcept for any such transactions solely among Wholly Owned Subsidiaries of the Company, sell or transfer any membership interests restructure, reorganize or other securities of Seller, (B) adjust, split, combine completely or reclassify partially liquidate or otherwise amend the terms of any membership interest or other security of Seller, (C) declare, authorize, set aside make or pay any dividend or other distribution (whether in cash, stock or other property) or (D) enter into any agreement with respect to the voting of any equity of Selleragreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iv) (A) merge or consolidate with any other Person, acquire any business or assets outside of the Ordinary Course of Business from any other Person with a fair market value (whether reasonably determined by mergerthe Company) or purchase price in excess of, stock purchaseor (B) make any loans, asset advances, guarantees or capital contributions to or investments in any Person (other than to or from the Company and any of its Wholly Owned Subsidiaries) in excess of $5,000,000 in any individual transaction or series of related transactions or $25,000,000 in the aggregate (it being understood that such aggregate limitation shall apply to all transactions contemplated by either clause (A) or (B)), in each case, including any amounts or value reasonably expected to be paid in connection with a future earn-out, purchase price adjustment, release of “holdback” or other business combination)similar contingent payment obligation, or that would reasonably be expected to prevent or materially impair the ability of the Company to consummate the transactions contemplated by this Agreement prior to the Outside Date, other than the purchase acquisitions of supplies inventory or other goods in the Ordinary Course of Business pursuant to the terms of a Contract binding on the Company or (B) form any new Subsidiaryof its Subsidiaries in effect as of the date of this Agreement or entered into following the date of this Agreement in accordance with the terms of this Section 5.7;
(v) (A) materially change the operation of the Businessissue, Assets or the Assumed Liabilities or any method of purchasesell, salepledge, leasedispose of, managementgrant, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of business;
(vi) make any loans, advances or capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of Business);
(vii) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guarantee, sellEncumber, mortgage, pledge, dispose of or incur any Lien on or otherwise encumber enter into any AssetsContract or other agreement, understanding or arrangement with respect to the voting of, any shares in the capital of the Company (including the Common Shares) or of any of its Subsidiaries, securities convertible or exchangeable into or exercisable for any such shares, or any options, warrants or other rights of any kind to acquire any such shares or such convertible or exchangeable securities (other than the (A) issuance of shares by a Wholly Owned Subsidiary of the Company to the Company or another Wholly Owned Subsidiary of the Company, (B) issuance of Common Shares in respect of Company Options outstanding as of the date of this Agreement or granted pursuant to clause (C), in each case, in accordance with their terms and, as applicable, the Stock Plans in effect on the date of this Agreement, (C) grant of up to 250,000 Company Options to employees (other than Executives) in the Ordinary Course of Business under the Stock Plans in effect as of the date of this Agreement (provided, however, that such Company Options shall not include any provisions regarding accelerated vesting in connection with a “change of control” (as defined in the applicable Stock Plan) or upon a termination of employment and the applicable award agreement shall clarify that any such provisions in the applicable Stock Plan do not apply to such Company Options), or (D) issuance of Common Shares pursuant to the terms and conditions of the Existing Warrants);
(vi) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its share capital or securities convertible or exchangeable into or exercisable for any shares of its share capital (including, with respect to the Company, for the avoidance of doubt, the Common Shares), other than the withholding of Common Shares to satisfy the payment of the exercise price or withholding Tax obligations upon the exercise of Company Options outstanding as of the date of this Agreement or granted in accordance with Section 5.7(a)(v), in each case, in accordance with their terms and, as applicable, the Stock Plans as in effect on the date of this Agreement;
(vii) incur any Indebtedness (including the issuance of any debt securities, warrants or other rights to acquire any debt security), except for (A) Indebtedness for borrowed money incurred in the Ordinary Course of Business not to exceed $1,000,000 individually and $5,000,000 in the aggregate or to fund expenditures expressly permitted by Section 5.7(a)(iv), (B) Indebtedness in replacement of existing Indebtedness for borrowed money on terms substantially consistent with or more favorable to the Company than the Indebtedness being replaced or (C) guarantees of Indebtedness of its Wholly Owned Subsidiaries otherwise incurred in compliance with this Section 5.7(a); provided that any Indebtedness that is extinguished in full prior to, or concurrently with, the Closing shall not be deemed to be a breach of this provision;
(viii) except as consistent with or reasonably related to, and not in excess of ten percent of the aggregate amounts of, with respect to the fiscal year ending December 31, 2018, the expenditures made in respect of the Company’s and its Subsidiaries’ operations during any one full month prior to the date of this Agreement for such fiscal year or the Company Budget (as applicable) or to the extent reasonably necessary to avoid a material business interruption as a result of any act of God, war, terrorism, earthquake, fire, hurricane, storm, flood, civil disturbance, explosion, partial or entire failure of utilities or information technology systems, or any other similar cause not reasonably within the control of the Company or its Subsidiaries, make or authorize any payment of, or accrual or commitment for, capital expenditures;
(ix) amend, supplement or otherwise modify any Company Budget, except for such amendments, supplements or other modifications to any Company Budget that would result in an increase of ten percent or less to the aggregate amounts set forth in any initial version of a Company Budget adopted by the Company Board;
(x) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement, other than Contracts with customers or suppliers entered into in the Ordinary Course of Business and, for the avoidance of doubt, any Contracts entered into in connection with an action expressly permitted by any of the Subsections of this Section 5.7(a), including any amendment, supplement or other modification to an existing Contract, which are governed by Section 5.7(a)(xi);
(xi) other than with respect to Material Contracts related to Indebtedness, which shall be governed by Section 5.7(a)(vii), or, for the avoidance of doubt as contemplated by Section 5.8(g), terminate or amend, modify, supplement or waive in a manner that is materially adverse to the Company and its Subsidiaries (taken as a whole), or assign, convey, Encumber or otherwise transfer (including pursuant to the division of a limited liability company), in whole or in part, material rights or interest pursuant to or in any Material Contract, other than (A) expirations of any such Contract in the Ordinary Course of Business, and (B) non-exclusive licenses, covenants not to ▇▇▇, releases, waivers or other rights under Intellectual Property Rights, in each case, granted in the Ordinary Course of Business;
(ixxii) acquire cancel, modify or waive any real property debts or undertake claims held by the Company or commit to undertake capital expenditures for the purchase any of equipment its Subsidiaries having in each case a value in excess of $1,000,000 individually or tangible assets exceeding $35,000 5,000,000 in the aggregate;
(xxiii) agree toamend any License contemplated by Schedule B6(b) in any material respect, request or adopt allow any such License to lapse, expire or terminate (A) any moratorium except where the lapse, expiration or suspension of payment termination of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official such License is with respect to Sellera License that has become obsolete, (C) an assignment for the benefit of creditors redundant or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any no longer required by applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (CLaw);
(xi) incur any Indebtedness or issue any debt securities or warrants or other rights to acquire debt securities of Seller or assume, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person for Indebtedness or capital obligations, in the case of any of the foregoing;
(xii) cancel any debts owed to or claims held by Seller in excess of $35,000;
(xiii) abandon, disclaim, dedicate to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreement;
(xiv) disclose any confidential amend, modify, terminate, cancel or proprietary information let lapse a material Insurance Policy, unless simultaneous with such termination, cancellation or confidential Business Intellectual Property lapse, replacement policies underwritten by insurance and reinsurance companies of internationally recognized standing are in full force and effect, in each case, providing coverage equal to any Personor greater than the coverage under the terminated, other than employees canceled or lapsed Insurance Policies for substantially similar premiums, as applicable, as in effect as of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives the date of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Sellerthis Agreement;
(xv) revalue other than with respect to Transaction Litigation, which shall be governed by Section 5.9, settle or compromise any Claim for an amount in excess of $500,000 individually or $2,000,000 in the aggregate during any calendar year, net of any amount covered by insurance, indemnification or existing reserves established in accordance with IFRS or any obligation or liability of it in excess of such amount or on a basis that would result in the imposition of any Order that would materially and adversely restrict the future activity or conduct of the Company or any of the assets its Subsidiaries or a finding or admission of the Sellera material violation of Law;
(xvi) make any changes with respect to accounting policies or procedures, except as required by GAAPchanges in IFRS;
(xvii) make, change or revoke any material Tax election, adopt or change any Tax accounting period, adopt or change any material Tax accounting method, file any amended Tax Return, enter intointo any closing agreement with respect to Taxes, settle or compromise any material Tax claim, audit, assessment, dispute or other proceeding, surrender any right to claim a refund of a material amount of Taxes, request any ruling from any Governmental Authority with respect to Taxes, agree to an extension or waiver of the statute of limitations with respect to material Taxes or take any action with respect to Taxes which would be reasonably expected to result in a material increase in the Tax obligation or liability of the Company or its Subsidiaries, or, in respect of any taxable period (or portion thereof) ending after the Closing Date, the Tax obligation or liability of Purchaser, Parent or any of their respective Subsidiaries;
(xviii) transfer, sell, divest or otherwise dispose of or transfer, or permit or suffer to exist the creation of any Encumbrance upon, any properties or assets (tangible or intangible, including any Intellectual Property Rights), product lines or businesses material to the Company and its Subsidiaries (taken as a whole), including the share capital of any of its Subsidiaries, other than (A) in the Ordinary Course of Business, (B) sales of obsolete assets, (C) with respect to assets with a fair market value (reasonably determined by the Company) not in excess of $1,000,000 individually or $5,000,000 in the Seller aggregate or (D) pursuant to become bound by the terms of any Contract that is or would constitute in effect as of the date of this Agreement and a Material Contractcopy of which has been made available to Purchaser prior to the date of this Agreement;
(xvixix) (A) change cancel, abandon or otherwise allow to lapse or expire any method Intellectual Property Rights that are owned by the Company or any of accounting its Subsidiaries and are material to the businesses of the Company and its Subsidiaries as currently conducted, except, solely with respect to Intellectual Property Rights that have reached their date of final expiration or accounting practiceare otherwise not material to the businesses of the Company and its Subsidiaries, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Business;
(xviixx) makeexcept as required pursuant to the terms of any Employee Plan in effect as of the date of this Agreement or as otherwise required by applicable Law, revoke (A) increase the compensation or benefits payable to any director, employee or individual independent contractor of the Company or its Subsidiaries, (B) become a party to, establish, adopt, amend or otherwise modify or commence participation in any Employee Plan, other than amendments to Employee Plans that are health and welfare plans in the Ordinary Course of Business, (C) pay or award, or commit to pay or award, any bonuses or incentive compensation, (D) enter into any employment or severance agreement (excluding offer letters that provide for no severance entitlements in excess of those required by applicable Law) with any director, officer, employee or individual independent contractor, other than the entry into a severance agreement in the Ordinary Course of Business upon the termination of employment of an employee who is not an Executive, (E) enter into any change in control or retention agreement with any Tax election by Seller that could adversely impact the amount of Taxes due director, officer, employee or payable individual independent contractor, (and/or any direct or indirect owner of equity interests in BuyerF) after the Closing Date;
(xviii) modifyestablish, adopt, enter into, amend or terminate any collective bargaining agreement, (G) take any action to accelerate the vesting or lapsing of restrictions or payment, or fund or in any other way secure the payment, of compensation or benefits under any Employee Plan, (H) terminate the employment or service of any employee or individual independent contractor who is an Executive, other than pursuant to the expiration of its term other than as a result of any action taken by Sellerfor cause, or other than as a result of a material breach by (I) hire any employee or individual independent contractor at the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunder;
(xix) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property;
(xx) commence, settle or compromise any ProceedingExecutive level;
(xxi) cancelengage in the production, materially reduce cultivation, marketing, distribution or fail sale of Cannabis or any products derived from or intended to maintain any insurance policy;be used in connection with Cannabis or services intended to relate to Cannabis in the United States to the extent such activities remain prohibited under applicable Law; or
(xxii) change agree, authorize or modify commit to do any of the Seller’s creditforegoing.
(b) Purchaser and Parent (i) shall not, collectionand shall cause its Subsidiaries not to, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect take or fail to pay take any actions that would, individually or delay payment in the aggregate, reasonably be expected to prevent or materially impair the consummation of payables or other Liabilities in any material respect;the transactions contemplated by this Agreement and (ii) shall comply with and satisfy the Parent Exclusivity Obligations.
(xxiiic) engage Nothing set forth in any transaction with any Related Parties; or
(xxiv) authorize this Agreement shall give Purchaser or enter into any agreementParent, commitment directly or understanding (whether written indirectly, the right to control or oral) with respect direct the Company’s or its Subsidiaries’ operations prior to the foregoingClosing or give the Company, directly or indirectly, the right to control or direct Purchaser’s, Parent’s or any of their respective Subsidiaries’ operations prior to the Closing.
Appears in 1 contract
Interim Operations. (a) From The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof until the earlier of the Closing or termination of this AgreementAgreement and prior to the Effective Time, Seller shall (i) operate the Business only in the Ordinary Course of Business, including maintaining appropriate service levels, and in compliance with applicable Law including any COVID-19 Measures; and (ii) use commercially reasonable efforts to except (A) maintain and preserve intact the business organization and goodwill of the Business, the Assets and the Assumed Liabilitiesas required by applicable Laws, (B) maintain satisfactory relationships with Seller’s clientsas otherwise required by this Agreement, operators, distributors, customers, insurance underwriters and other third parties having business dealings with Selleror by the terms of any Contract, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services of, the Business Employees.
(b) Without limiting the generality of the foregoing, except as set forth in Section 5.1(b6.1(a) of the Company Disclosure ScheduleLetter or (D) as Parent may approve in writing (such approval not to be unreasonably withheld, conditioned or delayed), it and its Subsidiaries shall use their respective reasonable best efforts to conduct the business of it and its Subsidiaries in the ordinary course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to preserve their business organizations intact and maintain all of their Licenses and relations with subscribers, suppliers, distributors, creditors, lessors, employees and business associates. Without limiting the generality of, and in furtherance of, the foregoing, from the date of this Agreement until the Effective Time, except (1) as required by applicable Laws, (2) as otherwise expressly permitted required by this Agreement or by the terms of any Contract, (3) as approved set forth in Section 6.1(a) of the Company Disclosure Letter, (4) as Parent may approve in writing by ▇▇▇▇▇(such approval not to be unreasonably withheld, from conditioned or delayed) or (5) for intercompany transactions between or among the date hereof until Company and any of its Subsidiaries in the earlier ordinary course of business, the Closing or the termination of this Agreement, Seller shall Company will not take any action which would require disclosure on Section 2.8 of the Disclosure Schedule orand will not permit its Subsidiaries to:
(i) take adopt any change in its certificate of incorporation or omit to take any action that results bylaws or may reasonably be expected to result in any of the representations and warranties of Seller other applicable governing instruments (whether by merger, consolidation or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfiedotherwise);
(ii) amend acquire assets (excluding pursuant to capital expenditures) from any other Person (x) with respect to fiscal year 2015, in excess of any remaining amounts budgeted in the Company Board approved budget for fiscal year 2015; (y) with respect to fiscal year 2016, in excess of the aggregate purchase price of assets (excluding pursuant to capital expenditures and excluding the acquisition of product lines, businesses or otherwise change the organizational documents of Sellerinterests therein) acquired during fiscal year 2015; or (z) that constitute a product line, business or any interest therein;
(iii) (A) authorize, issue, sell sell, pledge, dispose of, grant, transfer, encumber, or transfer authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any membership interests shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly-owned Subsidiary of the Company to the Company or another wholly-owned Subsidiary or the issuance of Shares in respect of Company Equity Awards outstanding as of the date of this Agreement in accordance with their terms and, as applicable, the Stock Plans as in effect on the date of this Agreement), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other securities of Seller, (B) adjust, split, combine or reclassify or otherwise amend the terms rights of any membership interest kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(iv) create or incur any Lien (other security than in connection with capital leases entered into in the ordinary course of Sellerbusiness) material to the Company or any of its Subsidiaries not incurred in the ordinary course of business on any assets of the Company or any of its Subsidiaries having a value in excess of $10 million in the aggregate;
(v) make any loans, advances, guarantees or capital contributions to or investments in any Person (Cother than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $10 million in the aggregate;
(vi) declare, authorizeset aside, set aside make or pay any dividend or other distribution (whether distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other propertydirect or indirect wholly-owned Subsidiary) or (D) enter into any agreement with respect to the voting of any equity of Seller;
(iv) (A) merge or consolidate with any other Person, acquire any business or assets of any other Person (whether by merger, stock purchase, asset purchase or other business combination), other than the purchase of supplies in the Ordinary Course of Business or (B) form any new Subsidiary;
(v) (A) materially change the operation of the Business, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of business;
(vi) make any loans, advances or its capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of Business)stock;
(vii) (A) institute reclassify, split, combine, subdivide or announce redeem, purchase or otherwise acquire, directly or indirectly, any increase in the compensation, bonuses of its capital stock or other benefits payable to securities convertible or exchangeable into or exercisable for any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change shares of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee its capital stock (other than for causethe withholding of Shares to satisfy withholding Tax obligations and net share settlements to cover the exercise price of stock options in respect of Company Equity Awards outstanding as of the date of this Agreement in accordance with their terms and, as applicable, the Stock Plans as in effect on the date of this Agreement);
(viii) transfer, lease, license, incur or assume any indebtedness for borrowed money or guarantee, sellindemnify, mortgage, pledge, dispose of or incur any Lien on endorse or otherwise encumber as an accommodation become responsible for any Assets, other than in the Ordinary Course such indebtedness of Business;
(ix) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become dueanother Person, or (D) any other thing under any applicable Law relating to bankruptcy issue or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur any Indebtedness or issue sell any debt securities or warrants or other rights to acquire any debt securities security of Seller the Company or assumeany of its Subsidiaries;
(ix) incur any capital expenditures, guarantee except (x) to the extent reasonably necessary to avoid a material business interruption as a result of any act of God, war, terrorism, earthquake, fire, hurricane, storm, flood, civil disturbance, explosion, partial or endorseentire failure of utilities or information technology systems, or any other similar cause not reasonably within the control of the Company or its Subsidiaries or (y) in any six month period, commencing October 1, 2015, the Company may make aggregate Qualifying Capital Expenditures (as defined in Schedule 6.1(a)(ix)) up to the Capex Cap (as defined in Schedule 6.1(a)(ix) of the Company Disclosure Letter) applicable to such six month period;
(x) enter into any Contract that would have been a Material Contract (substituting $10 million for any dollar thresholds set forth in the definition of “Material Contracts”) had it been entered into prior to the date this Agreement or amend or modify, or elect to terminate, in any material respect adversely to the Company or any of its Subsidiaries, any such Material Contract, other than extensions of such Material Contracts in effect on the day of this Agreement for a period of up to one (1) year on terms and conditions at least as favorable to the Company and its Subsidiaries, in the aggregate, as an accommodation the existing terms and conditions;
(xi) commence, settle, compromise or otherwisediscontinue any action, suit, claim, litigation, audit, investigation, arbitration, proceeding or other controversy, including any stockholder litigation or dispute against the obligations Company or any of its officers or directors that relates to the Merger and the Transactions involving or against the Company or any Person for Indebtedness of its Subsidiaries (“Merger Litigation”), other than (1) settlements that require payments by the Company or capital obligationsany of its Subsidiaries, net of insurance recoverables and any applicable reserves, not in excess of $10 million in the aggregate and (2) claims or litigation to the extent of the applicable reserves set forth in the Company Reports, that, in the case of any each of the foregoingclauses (i) and (ii), are not Merger Litigation;
(xii) cancel transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any debts owed material assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except (A) for the sale, lease or license of the Company’s products, services or equipment to its customers in the ordinary course of business consistent with past practice, (B) sales of obsolete assets, (C) except for sales, leases, licenses or claims held by Seller other dispositions of assets with a fair market value not in excess of $35,00010 million in the aggregate and (D) other than pursuant to Contracts in effect prior to the date of this Agreement;
(xiii) abandon, disclaim, dedicate except as required pursuant to the publicterms of any Company Plan in effect as of the date hereof, sellor as otherwise required by applicable Laws, assign take any of the director, officer or grant any security interest in, to employee or under any Business Intellectual Property or Business IP Agreementemployee benefit and compensation related actions set forth on Schedule 6.1(a)(xiii)(A) through (D) of the Company Disclosure Letter;
(xiv) disclose take any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives the employee related actions set forth in Schedule 6.1(a)(xiv) of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the SellerCompany Disclosure Letter;
(xv) revalue change an annual accounting period or adopt or change any of the assets of the Sellerits accounting methods, principles or practices, in each case, including for Tax purposes (including with respect to reserves), except as required by applicable Law or GAAP, or enter into, or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contract;
(xvi) (A) change terminate, cancel or amend any method insurance policy maintained by it covering the Company or any of accounting its Subsidiaries or accounting practicetheir respective properties that is not replaced by a comparable or greater amount of insurance coverage, other than changes required under applicable Law or GAAP or (B) fail to use commercially reasonable efforts to maintain in full force and effect any material insurance policy in a form and amount consistent with past practice; provided that the Seller’s booksCompany may agree to any increases or decreases in deductibles, accounts and records policy amounts or coverage amounts in the Ordinary Course of Businessits reasonable discretion;
(xvii) make, revoke enter into any new line of business that is unrelated to any line of business conducted by the Company or change any Tax election by Seller that could adversely impact of its Subsidiaries as of the amount date of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Datethis Agreement;
(xviii) modify, amend or terminate (other than pursuant modify in any respect materially adverse to the expiration Company, any material Franchise or any material License issued by any Governmental Entity and held by the Company or any of its term other than as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunderSubsidiaries;
(xix) fail to pay maintain all material Franchises and all material Licenses held by the Company or any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain of its Subsidiaries in full force and further prosecute any applications effect, except for registration of Owned Intellectual Property or otherwise abandonsuch failure as would not, let lapse or fail to protect any Owned Intellectual Propertyand would not reasonably be expected to, materially and adversely impact the Company and its Subsidiaries, taken as a whole;
(xx) commence, settle fail to make any required contributions to the federal Universal Service Fund or compromise any Proceedingstate equivalent thereto (other than any contributions that are not yet due and payable or the validity or amount of which is being contested in good faith);
(xxi) cancel, materially reduce make any payment that is a Restricted Payment (as defined in the Company’s indentures under which its existing indebtedness has been issued) under any existing indebtedness of the Company (but not a Restricted Payment by any Subsidiary of the Company to the Company or fail to maintain any insurance policy;another Subsidiary of the Company that is not otherwise prohibited by the terms of such indebtedness); or
(xxii) change enter into, amend or modify any Contract with any Affiliate of the Seller’s credit, collectionCompany that is not a Subsidiary of the Company, or payment policiesany other Contract that would be a “Related Party Transaction” as defined under the Company’s Related Party Transaction Approval Policy, procedures other than extensions of existing Contracts involving revenues or practices, including acceleration of collections or receivables (whether or not past due) expenses in any material respect fiscal year of less than $120,000 and only to the extent such Contract can be terminated at will without any cost or fail penalty at Closing; provided that Contracts for access to pay or delay payment of payables office space or other Liabilities in incidental matters need only be terminable at any material respect;time after thirty (30) days after the Closing.
(xxiii) engage in make or change any transaction material Tax election, file any material amended Tax Return, enter into any closing agreement with respect to a material amount of Taxes, settle any Related Partiesmaterial Tax claim or assessment relating to the Company or any of its Subsidiaries, surrender any right to claim a refund of a material amount of Taxes, or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating to the Company or any of its Subsidiaries; or
(xxiv) agree, authorize or enter into commit to do any agreementof the foregoing. provided, commitment however, that nothing contained in this Agreement shall give Parent or understanding (whether written Merger Sub, directly or oral) indirectly, any right to control or direct the operations of the Company and its Subsidiaries prior to the Effective Time. Prior to the Effective Time, each of the Company and Parent shall exercise, consistent with the other terms and conditions of this Agreement, complete control and supervision over their respective businesses, and notwithstanding anything to the contrary in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 6.1 or elsewhere in this Agreement to the foregoingextent the requirement of such consent would reasonably be expected to be a violation of applicable Laws.
(b) Parent shall not knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent the consummation of the Merger.
Appears in 1 contract
Sources: Merger Agreement (CSC Holdings LLC)
Interim Operations. (a) From The Company shall, and shall cause each of its Subsidiaries to, from and after the date hereof of this Agreement until the earlier of the Closing or Effective Time and the termination of this Agreement pursuant to Article VIII, unless Parent shall otherwise approve in writing, and except as otherwise expressly required by this Agreement, Seller shall (i) operate required in order to comply with applicable Law or required in order to comply with COVID-19 Measures or deemed advisable by the Business only Company, acting reasonably, in connection with the termination or modification of COVID-19 Measures, use commercially reasonable efforts to conduct its business in the Ordinary Course of Business, including maintaining appropriate service levels, and in compliance with applicable Law including any COVID-19 Measures; and (ii) use commercially reasonable efforts to (A) maintain and preserve intact the business organization and goodwill of the Business, the Assets and the Assumed Liabilities, (B) maintain satisfactory relationships with Seller’s clients, operators, distributors, customers, insurance underwriters and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when dueand, (D) to the extent consistent therewith, shall use and cause each of its Subsidiaries to use their commercially reasonable efforts to maintain in effect all Permits its and (E) maintain good its Subsidiaries’ relations withand goodwill with Governmental Entities, customers, suppliers, distributors, and keep available the services of, the Business Employees.
(b) employees. Without limiting the generality of and in furtherance of the foregoingforegoing sentence, from the date of this Agreement until the earlier of the Effective Time and the termination of this Agreement pursuant to Article VIII, except (i) as set forth in Section 5.1(botherwise expressly required (A) of the Disclosure Schedule, as expressly permitted by this Agreement Agreement, (B) by any Governmental Entity, (C) to comply with (1) applicable Law, or (2) the terms of any Material Contract binding on the Company or any of its Subsidiaries in effect prior to the date of this Agreement, (ii) as approved in writing by ▇▇▇▇▇Parent (such approval not to be unreasonably conditioned, from withheld or delayed) or (iii) set forth in the date hereof until the earlier corresponding subsection of Section 6.01(a) of the Closing or Company Disclosure Schedule, the termination of this Agreement, Seller Company shall not take any action which would require disclosure on Section 2.8 of the Disclosure Schedule orand shall cause its Subsidiaries not to:
(i) take or omit to take adopt any action that results or may reasonably be expected to result change in any of the representations and warranties of Seller or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfiedits Organizational Documents;
(ii) amend or otherwise change the organizational documents of Seller;
(iii) (A) authorize, issue, sell or transfer any membership interests or other securities of Seller, (B) adjust, split, combine or reclassify or otherwise amend the terms of any membership interest or other security of Seller, (C) declare, authorize, set aside make or pay any dividend or other distribution (whether in cash, stock or other property) or (D) enter into any agreement with respect to the voting of any equity of Seller;
(iv) (A) merge or consolidate with any other Person, except for any such transactions solely among Wholly Owned Subsidiaries of the Company or transactions permitted by Section 6.01(a)(iii), or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its properties, assets, operations or businesses;
(iii) (A) acquire by merger or consolidation with, or (B) without the prior written consent of Parent (not to be unreasonably conditioned, withheld or delayed), purchase any, all or substantially all of the assets of, any business or assets of any other Person (whether by mergercorporation, stock purchasepartnership, asset purchase association, joint venture or other business combinationorganization or division thereof;
(iv) transfer, sell, lease, license, divest, cancel, abandon, allow to lapse or expire, or otherwise dispose of, or incur, permit or suffer to exist the creation of any Encumbrance (other than any Permitted Encumbrances) upon, any material properties or assets (tangible or intangible, including any Intellectual Property Rights), product lines or businesses of the Company or any of its Subsidiaries, including capital stock or other than the purchase equity interests of supplies any of its Subsidiaries, except in connection with (A) sales of obsolete assets (not including Intellectual Property Rights), (B) sales, leases, or other dispositions of inventory, rental fleet or other goods (not including Intellectual Property Rights) in the Ordinary Course of Business or (B) form any new Subsidiary;
(v) (A) materially change the operation of the Business, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of business;
(vi) make any loans, advances or capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of Business);
(vii) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, and (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose non-exclusive licenses of or incur any Lien on or otherwise encumber any Assets, other than Intellectual Property Rights entered into in the Ordinary Course of Business;
(ixv) issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, Encumber or otherwise enter into any Contract or other agreement, understanding or arrangement with respect to the voting of, any shares of capital stock of the Company (including, for the avoidance of doubt, Shares) or capital stock or other equity interests of any of its Subsidiaries, securities convertible or exchangeable into or exercisable for any such shares of capital stock or other equity interests, or any options, warrants or other rights of any kind to acquire any real property such shares of capital stock, other equity interests or undertake such convertible or commit to undertake exchangeable securities (other than the issuance of shares of such capital expenditures for the purchase of equipment stock, other equity securities, or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request convertible or adopt exchangeable securities (A) any moratorium by a Wholly Owned Subsidiary of the Company to the Company or suspension another Wholly Owned Subsidiary of payment of any Indebtedness, the Company or (B) the appointment in respect of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing Company Equity Awards outstanding as of the inability date of Seller to pay its debts as they become due, or (D) any other thing under any this Agreement in accordance with their terms and the applicable Law relating to bankruptcy or insolvency with similar Stock Plan in effect as any of on the foregoing (A) through (CCapitalization Date);
(xivi) incur make any Indebtedness loans or issue any debt securities or warrants or other rights advances of money to acquire debt securities of Seller or assume, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person (other than the Company and its Subsidiaries), except for Indebtedness advances to employees or capital obligations, in officers of the case of Company or any of the foregoing;
(xii) cancel any debts owed to or claims held by Seller in excess of $35,000;
(xiii) abandon, disclaim, dedicate to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreement;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property its Subsidiaries pursuant to any Person, other than employees of Seller that are subject to a confidentiality advancement obligations under the Company’s or non-disclosure covenant protecting against further disclosure thereof any Subsidiary’s Organizational Documents or to other contractors indemnification agreement in effect on the date hereof or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;
(xv) revalue any of the assets of the Seller, except as required by GAAP, or enter into, or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contract;
(xvi) (A) change any method of accounting or accounting practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records for expenses incurred in the Ordinary Course of Business;
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or other equity interests (including with respect to the Company, for the avoidance of doubt, Shares), except for (A) dividends paid by any Wholly Owned Subsidiary to the Company or to any other Wholly Owned Subsidiary of the Company or (B) dividends required to be paid with respect to the Series B Preferred Stock or the Series C Preferred Stock pursuant to the Series B Certificate of Designation or the Series C Certificate of Designation, respectively;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire or offer to redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, other equity interests or securities convertible or exchangeable into or exercisable for any shares of its capital stock or other equity interests (including with respect to the Company, for the avoidance of doubt, Shares), other than the withholding or use of Shares to satisfy the payment of the exercise price on the exercise of a Company Option or withholding Tax obligations upon the exercise, vesting or settlement of Company Equity Awards outstanding as of the date of this Agreement, in each case, in accordance with their terms and, as applicable, the Stock Plans as in effect on the Capitalization Date;
(ix) adopt or implement any stockholder rights plan or similar arrangement;
(x) form any Subsidiary or enter into any joint venture, partnership, limited liability corporation, strategic alliance or similar arrangement;
(xi) incur any Indebtedness (including the issuance of any debt securities, warrants or other rights to acquire any debt security), except for (A) Indebtedness in replacement of existing Indebtedness for borrowed money on terms substantially consistent with or more favorable to the Company than the Indebtedness being replaced; (B) Indebtedness pursuant to the Company’s existing credit facilities listed on Section 6.01(a)(xi) of the Company Disclosure Schedule as in effect as of the date hereof; (C) Indebtedness for capitalized leases (including finance or operating leases), or Indebtedness in respect of the deferred and unpaid purchase price of property or equipment, in each case incurred in the Ordinary Course of Business, provided that such Indebtedness may not exceed $2,500,000 in the aggregate; (D) Indebtedness incurred (1) by the Company that is owed to any Wholly Owned Subsidiary or (2) by any Wholly Owned Subsidiary that is owing to the Company or any other Wholly Owned Subsidiary; or (E) guarantees of Indebtedness of its Wholly Owned Subsidiaries otherwise incurred in compliance with this Section 6.01(a);
(xii) make or authorize any payment of, or accrual or commitment for, capital expenditures, except (A) those contemplated by the Company’s capital expenditure forecast for the relevant fiscal year, which capital expenditure forecast has been made available to Parent prior to the date of this Agreement, and (B) any unforecasted capital expenditure, with respect to this clause (B) in an amount not to exceed $5,000,000 in the aggregate;
(xiii) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement, other than Contracts with customers or suppliers entered into in the Ordinary Course of Business;
(xiv) other than with respect to Material Contracts related to Indebtedness, which shall be governed by Section 6.01(a)(vi) and Section 6.01(a)(xi), terminate, not renew (by exercising an applicable non-renewal right, or by not exercising an applicable renewal right), or in any material respect amend or otherwise modify or waive, or assign, convey, Encumber or otherwise transfer, in whole or in part, rights or interest pursuant to or in, any Material Contract, other than expirations or non-renewals of any such Contract in the Ordinary Course of Business and in accordance with the terms of such Contract with no further action by the Company or any of its Subsidiaries, except for any ministerial actions;
(xv) cancel, modify or waive any debts or similar claims held by the Company or any of its Subsidiaries having in each case a value in excess of $500,000 individually or $1,000,000 in the aggregate;
(xvi) amend any License contemplated by Section 4.05(d) in any material respect, or allow any such License to lapse, expire or terminate (except where the lapse, expiration or termination of any such License is with respect to a License that has become obsolete, redundant or no longer required by applicable Law);
(xvii) makeother than with respect to Transaction Litigation, revoke any Proceeding in connection with, arising out of or change otherwise related to a demand for appraisal under Section 262 of the DGCL or any Tax election claim, audit, assessment or dispute, which shall be governed by Seller that could adversely Section 6.11, Section 3.02(f) and Section 6.01(a)(xix), respectively, settle or compromise any Proceeding for an amount in excess of $500,000 in the aggregate, or which would reasonably be expected to (A) prevent, materially delay or materially impair the consummation of the transactions contemplated by this Agreement, (B) have a materially negative impact on the amount operations and reputation of Taxes due the Company and its Subsidiaries or payable (and/or C) involve any direct criminal liability, any admission of material wrongdoing or indirect owner any material wrongful conduct by the Company or any of equity interests in Buyer) after the Closing Dateits Subsidiaries;
(xviii) modifymake any changes with respect to accounting policies or procedures, amend or terminate (other than pursuant to the expiration of its term other than except, in each case, as a result of any action taken required by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently changes in effect or termination release or assign any material rights or claims thereunderGAAP;
(xix) fail make, change or revoke any material Tax election, change an annual Tax accounting period, adopt or change any material Tax accounting method, file any material amended Tax Return, enter into any closing agreement with respect to pay material Taxes, settle any required maintenance material Tax claim, audit, assessment or other similar fees dispute, surrender any right to claim a material refund, agree to an extension or otherwise fail waiver of the statute of limitations with respect to make required filings the assessment or payments required determination of any material Tax, or take any action which would be reasonably expected to maintain and further prosecute result in a material increase in the Tax liability of the Company or its Subsidiaries, or, in respect of any applications for registration taxable period (or portion thereof) ending after the Closing Date, the Tax liability of Owned Intellectual Property Parent or otherwise abandon, let lapse or fail to protect any Owned Intellectual Propertyits Affiliates;
(xx) commenceexcept as required pursuant to the terms of any Company Benefit Plan in effect as of the date of this Agreement or as required by applicable Law or the terms of this Agreement, settle (A) increase in any manner the compensation or compromise consulting fees, bonus, or other benefits, severance or termination pay of any Proceedingcurrent or former director, officer, employee or other service provider, (B) become a party to, establish, adopt, amend, commence participation in or terminate any Company Benefit Plan or any arrangement that would have been a Company Benefit Plan had it been entered into prior to the date of this Agreement, other than in connection with routine, immaterial or ministerial amendments to health and welfare plans that do not materially increase benefits or result in a material increase in administrative costs, (C) grant any new awards, or amend or modify the terms of any outstanding awards (including, in each case, Company Equity Awards), under any Company Benefit Plan, (D) take any action to accelerate the vesting or lapsing of restrictions or payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Benefit Plan, (E) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan that is required by applicable Law to be funded or change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP, (F) forgive any loans or issue any loans to any current or former director, officer, employee or other service provider (other than routine travel advances issued in the Ordinary Course of Business), (G) hire any employee or engage any independent contractor (who is a natural person) with total cash compensation (an annual salary or wage rate or consulting fees and target annual cash bonus opportunity) in excess of $175,000, or (H) terminate the employment of any employee other than for cause;
(xxi) cancelbecome a party to, materially reduce establish, adopt, amend, commence participation in or fail to maintain terminate any insurance policy;collective bargaining agreement or other agreement with a labor union, labor organization, works council or similar organization; or
(xxii) change or modify the Seller’s creditagree, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;
(xxiii) engage in any transaction with any Related Parties; or
(xxiv) authorize or enter into commit to do any agreement, commitment or understanding (whether written or oral) with respect to of the foregoing.
(b) Nothing set forth in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time or give the Company, directly or indirectly, the right to control or direct the Parent’s or its Subsidiaries’ operations prior to the Effective Time.
Appears in 1 contract
Interim Operations. (a) From Except as required by applicable Law or otherwise expressly required by this Agreement, the Company covenants and agrees that, from and after the date hereof until and prior to the earlier Effective Time, except with the prior written consent of Parent, the Closing or termination of this AgreementCompany shall, Seller and shall (i) operate the Business only cause its Subsidiaries to, conduct their business in the Ordinary Course of Business, including maintaining appropriate service levelsordinary course consistent with past practice and shall, and in compliance with applicable Law including any COVID-19 Measures; and (ii) shall cause its Subsidiaries to, use their respective commercially reasonable efforts to (A) preserve their business organizations intact and maintain and preserve intact the business organization existing relations and goodwill of the Business, the Assets and the Assumed Liabilities, (B) maintain satisfactory relationships with Seller’s clients, operators, distributorsGovernmental Entities, customers, insurance underwriters suppliers, employees and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services of, the Business Employeesassociates.
(b) Without limiting the generality of the foregoingforegoing and in furtherance thereof, from the date of this Agreement until the Effective Time, except as (A) required by applicable Law, (B) otherwise expressly required by this Agreement, (C) as set forth in the relevant subsection of Section 5.1(b6.1(b) of the Company Disclosure ScheduleLetter, as expressly permitted by this Agreement or as approved (D) with the prior written consent of Parent ((X) which consent, solely with respect to the items and actions set forth in writing by ▇▇▇▇▇clauses (iii), from the date hereof until the earlier of the Closing or the termination of this Agreement(v), Seller (ix), (xiii), (xv), (xvi) and (xvii), shall not take any be unreasonably withheld, conditioned or delayed so long as the action which or omission (or series of related actions or omissions) the subject of such clauses would require disclosure on Section 2.8 of the Disclosure Schedule or:
(i) take or omit to take any action that results or may not reasonably be expected to result in any (x) the Company being obligated to make payments in excess of $1,000,000 or (y) additional cost, expense or liability to Parent or Merger Sub hereunder in excess of $1,000,000, (Y) which consent, solely with respect to the representations items and warranties of Seller or the Beneficial Owners actions set forth herein being in clause (xi), shall not be unreasonably withheld, conditioned or becoming untrue delayed, and (Z) which consent, with respect to the other following clauses, may be given or withheld in any material respect Parent’s sole discretion), the Company shall not, and the Company shall cause its Subsidiaries not to:
(i) amend, supplement or in any otherwise change its certificate of the conditions set forth herein not being satisfiedincorporation, bylaws, limited liability company agreement or other applicable governing instruments;
(ii) amend merge or otherwise change the organizational documents of Sellerconsolidate with any other Person or restructure, reorganize or completely or partially liquidate;
(iii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any material assets from any other Person;
(iv) issue, deliver, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, delivery, sale, pledge, disposition, grant, transfer, lease, license, guaranty or encumbrance of, any shares of its capital stock or equity interests or the capital stock or equity interests of any of its Subsidiaries (other than (A) authorizethe issuance of Shares upon the exercise of Company Options or awards under the ESPP or the settlement of Company RSUs, issue, sell in each case in accordance with the Stock Plans and that are outstanding as of the date hereof or transfer any membership interests that are issued after the date hereof in compliance with this Agreement or other securities of Seller, (B) adjustthe issuance or transfer of capital stock or equity interests of a wholly owned Subsidiary of the Company or any of its wholly-owned Subsidiaries to the Company or another wholly owned Subsidiary), splitor securities convertible or exchangeable into or exercisable for any shares of such capital stock, combine or reclassify any options, stock units, stock awards, warrants or otherwise amend the terms other rights of any membership interest kind to acquire any shares of such capital stock, equity interests, convertible or exchangeable securities;
(v) make any loans, advances or capital contributions to or investments in any Person (other security than the Company or any direct or indirect wholly owned Subsidiary of Seller, the Company) in excess of $250,000 or outside the ordinary course of business consistent with past practice;
(Cvi) declare, authorizeset aside, set aside make or pay any dividend or other distribution (whether distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or equity interests (except for cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other propertydirect or indirect wholly owned Subsidiary) or (D) enter into any agreement with respect to the voting of any equity of Seller;
(iv) (A) merge or consolidate with any other Person, acquire any business or assets of any other Person (whether by merger, stock purchase, asset purchase or other business combination), other than the purchase of supplies in the Ordinary Course of Business or (B) form any new Subsidiary;
(v) (A) materially change the operation of the Business, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of business;
(vi) make any loans, advances or its capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of Business)stock;
(vii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or equity interests or securities convertible or exchangeable into or exercisable for any shares of its capital stock or equity interests (other than (A) institute or announce any increase the acquisition in the compensation, bonuses ordinary course of business consistent with past practice of any Shares tendered by current or other benefits payable former Service Providers in connection with the cashless exercise of Company Options or in order to any Business Employeespay Taxes in connection with the exercise of Company Options or the vesting of Company RSUs, (B) enter intorepurchases of Shares at a price per Share not exceeding the Per Share Merger Consideration to the extent required or permitted pursuant to the terms and conditions of awards granted under the Stock Plans outstanding as of the date hereof, amend the form of which has been made available to Parent prior to the date hereof or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) repurchases of Shares pursuant to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit the Stock Repurchase Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);in accordance with its terms until the Stock Repurchase Plan is terminated pursuant to Section 6.17.
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on or otherwise encumber any Assets, other than in the Ordinary Course of Business;
(ix) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur any Indebtedness for borrowed money or guarantee such Indebtedness of another Person (other than a wholly owned Subsidiary of the Company), or issue or sell any debt securities or warrants or other rights to acquire any debt securities security of Seller the Company or assumeany of its Subsidiaries, guarantee in each case other than in the ordinary course under letters of credit, lines of credit or endorseother credit facilities or arrangements in effect on the date hereof so long as the total Indebtedness incurred under all such letters of credit, lines of credit or credit facilities does not exceed $500,000 in the aggregate;
(ix) make or authorize any capital expenditures in excess of $250,000 individually or $500,000 in the aggregate, other than in accordance with the capital expenditure plan set forth on Section 6.1(b)(ix) of the Company Disclosure Letter in the ordinary course of business;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or by a Governmental Entity;
(xi) institute, compromise, settle, come to an accommodation arrangement regarding or otherwiseagree to compromise, settle or come to an arrangement regarding any claims (A) involving amounts in excess of $50,000 individually or $100,000 in the obligations aggregate, (B) that would impose any non-monetary obligation on the Company or its Subsidiaries or Affiliates that would continue after the Effective Time or (C) involving any stockholder, director or director nominee of the Company or that would grant any rights with respect to appointment or nomination of directors;
(xii) make, change or rescind any material Tax election or method of Tax accounting, file any material amended Tax Return, settle or compromise any material Tax liability, consent to or request any extension or waiver of any Person for Indebtedness limitation period with respect to any claim or assessment of a material amount of Taxes (other than pursuant to extensions of time to file Tax Returns in the ordinary course of business consistent with past practices), enter into any closing agreement with respect to any material Tax or surrender any right to claim a material Tax refund, fail to pay any Taxes as they become due and payable;
(xiii) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire, ▇▇▇▇▇ ▇ ▇▇▇▇ on or otherwise dispose of any material assets, properties or rights of the Company or its Subsidiaries, including capital obligationsstock of any of its Subsidiaries, except (A) in the ordinary course of business consistent with past practice (which, in the case of any Intellectual Property, shall be limited to only nonexclusive licenses or subscriptions granted to customers in the ordinary course of business) and (B) pursuant to Contracts in effect on the date of this Agreement to the extent set forth on Section 6.1(b)(xiii) of the foregoing;
Company Disclosure Letter (xii) cancel any debts owed and made available to or claims held by Seller in excess of $35,000;
(xiii) abandon, disclaim, dedicate Parent prior to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreementdate hereof);
(xiv) disclose except as required under applicable Law or the terms of any confidential Benefit Plan in effect as of the date hereof (A) grant, provide or proprietary information increase (or confidential Business Intellectual Property commit to grant, provide or increase) any severance or termination payments or benefits to any Person, current or former Service Provider; (B) increase in any manner (or commit to increase in any manner) the compensation or benefits of any current or former Service Provider (other than in the ordinary course consistent with past practices in all respects (including as to number of promotions, identity of employees being promoted, timing thereof and amount of Seller that increases) for employees with aggregate annual compensation potential (after taking into account such increase) of $200,000 or less who are subject being promoted to a confidentiality higher paying position), (C) become a party to, establish, adopt, terminate or non-disclosure covenant protecting against further disclosure thereof amend (or commit to become a party to, establish, adopt, terminate or amend) any Benefit Plan or arrangement that would have been a Benefit Plan if in effect on the date hereof (other contractors than routine changes to welfare plans in the ordinary course consistent with past practice) or representatives accelerate the vesting of, or lapse of Seller who are similarly subject restrictions on, any compensation (including any Company Option, Company RSU or Company PSU) for the benefit of any Person; (D) establish, adopt, enter into or amend any collective bargaining agreement, plan, trust, fund, policy or arrangement for the benefit of any current or former Service Providers or any of their beneficiaries; (E) cause the funding of any rabbi trust or similar arrangement or take any action to such an obligation fund or in any other way secure the payment of confidentiality compensation or benefits under any Benefit Plan; or (F) terminate the employment or services of any Service Provider with annual compensation in excess of $200,000 other than for cause, or hire any Service Provider for annual compensation (base salary and non-disclosure pursuant to a written agreement with the Sellerincentive opportunities) in excess of $200,000;
(xv) revalue abandon, encumber, convey title (in whole or in part), exclusively license or grant any right or other licenses to material Intellectual Property owned or exclusively licensed to the Company or any of the assets of the Seller, except as required by GAAPits Subsidiaries, or enter into, into licenses or permit agreements that impose material restrictions upon the Company or any of the assets of the Seller its Subsidiaries with respect to become bound Intellectual Property owned by any Contract that is or would constitute a Material Contractthird party, in each case other than in the ordinary course of business consistent with past practice;
(xvi) (A) change modify, amend or terminate any method of accounting or accounting practiceMaterial Contract, other than changes required under applicable Law or GAAP or (B) fail enter into any successor agreement to maintain the Seller’s books, accounts and records an expiring Material Contract other than in the Ordinary Course ordinary course of Businessbusiness consistent with past practice or that does not change the terms of such expiring Material Contract or (C) enter into any new agreement that would have been considered a Material Contract if it were entered into on or prior to the date hereof;
(xvii) maketerminate, revoke cancel, materially amend or change materially modify any Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date;Insurance Policies; or
(xviii) modifyagree, amend or terminate (other than pursuant to the expiration of its term other than as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunder;
(xix) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property;
(xx) commence, settle or compromise any Proceeding;
(xxi) cancel, materially reduce or fail to maintain any insurance policy;
(xxii) change or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;
(xxiii) engage in any transaction with any Related Parties; or
(xxiv) authorize or enter into commit to do any agreement, commitment or understanding (whether written or oral) with respect to of the foregoing.
Appears in 1 contract
Sources: Merger Agreement (Sciquest Inc)
Interim Operations. (a) From Each of the Company and EFIH covenants and agrees as to itself and each of its Subsidiaries (other than the Oncor Entities) that, except (i) as otherwise specifically permitted or required by the provisions of this Agreement and the Plan of Reorganization, (ii) as Parent may approve in writing (such approval, not to be unreasonably withheld, delayed or conditioned), (iii) as is required by any applicable Law or any Governmental Entity; provided that, to the extent legally permissible, the Company or EFIH shall provide prompt written notice to Parent of any such requirement; (iv) as set forth in Section 6.1(a) of the Company Disclosure Letter, or (v) as required by the Bankruptcy Court in the Chapter 11 Cases without any of the E-Side Debtors having requested or applied (or having requested that any of their respective Affiliates make such request or application) for the Bankruptcy Court to impose such requirement (and with the Company and EFIH, to the extent requested by Parent prior to such imposition, having used commercially reasonable efforts to challenge such imposition before the Bankruptcy Court), in each case after the date hereof and prior to the earlier of the Termination Date (as defined below) and the Effective Time, each of the Company and EFIH shall, and shall cause each of their respective Subsidiaries (other than the Oncor Entities) to, conduct its business and the Chapter 11 Cases in accordance with the Bankruptcy Code and the orders of the Bankruptcy Court and use its reasonable best efforts to preserve its business organizations intact, and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, employees and business associates. Notwithstanding the foregoing, from the date of this Agreement until the earlier of the Closing or termination of this AgreementTermination Date and the Effective Time, Seller shall (i) operate the Business only in the Ordinary Course of Business, including maintaining appropriate service levels, and in compliance with applicable Law including any COVID-19 Measures; and (ii) use commercially reasonable efforts to except (A) maintain and preserve intact as otherwise specifically permitted or required by the business organization and goodwill provisions of the Business, the Assets this Agreement and the Assumed LiabilitiesPlan of Reorganization, (B) maintain satisfactory relationships with Seller’s clientsas Parent may approve in writing (such approval, operatorsnot to be unreasonably withheld, distributors, customers, insurance underwriters and other third parties having business dealings with Sellerdelayed or conditioned), (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay as is required by any applicable Law or perform, in all material respects, other obligations when dueany Governmental Entity, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services of, the Business Employees.
(b) Without limiting the generality of the foregoing, except as set forth in Section 5.1(b6.1(a) of the Company Disclosure Schedule, Letter or (E) as expressly permitted required by this Agreement or as approved the Bankruptcy Court in writing by ▇▇▇▇▇, from the date hereof until the earlier Chapter 11 Cases without any of the Closing E-Side Debtors having requested or applied (or having requested that any of their respective Affiliates make such request or application) for the termination of this AgreementBankruptcy Court to impose such requirement (and with the Company and EFIH, Seller shall not take any action which would require disclosure on Section 2.8 to the extent requested by Parent prior to such imposition, having used commercially reasonable efforts to challenge such imposition before the Bankruptcy Court), each of the Disclosure Schedule orCompany and EFIH will not and will not permit any of its respective Subsidiaries (other than the Oncor Entities) to:
(i) take adopt any change in its certificate of incorporation, bylaws, limited liability company agreement or omit to take any action that results or may reasonably be expected to result in any of the representations and warranties of Seller or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfiedother applicable governing instruments;
(ii) amend or otherwise change the organizational documents of Seller;
(iii) (A) authorize, issue, sell or transfer any membership interests or other securities of Seller, (B) adjust, split, combine or reclassify or otherwise amend the terms of any membership interest or other security of Seller, (C) declare, authorize, set aside make or pay any dividend or other distribution (whether in cash, stock or other property) or (D) enter into any agreement with respect to the voting of any equity of Seller;
(iv) (A) merge or consolidate with any other Person;
(iii) adopt a plan of complete or partial liquidation, acquire any business or assets of any other Person (whether by mergerdissolution, stock purchaserestructuring, asset purchase recapitalization or other business combination), reorganization other than the Plan of Reorganization;
(iv) make any acquisition of any assets or Person for a purchase of supplies price individually or in the Ordinary Course aggregate in excess of Business or (B) form any new Subsidiary$10,000,000;
(v) issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of any shares of its capital stock or other equity interests; other than (A) materially change the operation issuance of shares of EFH Common Stock upon the Businesssettlement of awards under the Company Stock Plans (and dividend equivalents thereon, Assets or the Assumed Liabilities or any method of purchaseif applicable), sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter the issuance of equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company, or (C) pursuant to permitted borrowings under the DIP Facility or the modification, replacement, refunding, renewal, extension or refinancing of the DIP Facility or the modification, replacement, refunding, renewal, extension or refinancing thereof (provided that any modification, replacement, refunding, renewal, extension or refinancing shall not be for an amount greater than the then current outstanding principal amount thereof except by an amount equal to the unpaid accrued interest and premium thereon plus the reasonable amounts paid in respect of fees and expenses incurred in connection with such modification, replacement, refunding, renewal, extension or refinancing), or, securities convertible or exchangeable into a new line or exercisable for any shares of business such capital stock or abandon other equity interests, or discontinue an existing line any options, warrants or other rights of businessany kind to acquire any shares of such capital stock or other equity interests or such convertible or exchangeable securities;
(vi) make any loans, advances or capital contributions to, or investments in, any Person (other than advances in or to the Company or any direct or indirect wholly owned Subsidiary of expenses to Business Employees the Company) individually or in the Ordinary Course aggregate in excess of Business)$10,000,000;
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or other equity interests (Aexcept for dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary of the Company) institute or announce enter into any increase agreement with respect to the voting of its capital stock or other equity interests or take any action that would result in the compensation, bonuses Company or other benefits payable any of its Subsidiaries becoming subject to any Business Employees, (B) enter into, amend restriction not in existence on the date hereof with respect to the payment of distributions or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause)dividends;
(viii) transferreclassify, leasesplit, licensecombine or subdivide, guaranteedirectly or indirectly, sellany of its capital stock, mortgage, pledge, dispose equity interests or securities convertible or exchangeable into or exercisable for any shares of its capital stock or incur any Lien on or otherwise encumber any Assets, other than in the Ordinary Course of Businessequity interests;
(ix) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any of its capital stock or equity interests or any securities of convertible into or exchangeable or exercisable for capital stock or equity interests, or any warrants, calls, options or other rights to acquire any real property such capital stock, securities or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregateinterests;
(x) agree torepurchase, request redeem, defease, cancel, prepay, forgive, issue, sell, incur or adopt otherwise acquire any indebtedness for borrowed money or any debt securities or rights to acquire debt securities, of the Company or any of its Subsidiaries other than pursuant to the Plan of Reorganization, or assume, guarantee or otherwise become responsible for such indebtedness of another Person (other than a wholly owned Subsidiary of the Company), except for indebtedness for borrowed money (A) incurred or repaid under the DIP Facility or the modification, replacement, refunding, renewal, extension, repayment or refinancing (subject to clause (v) above) thereof, in each case, to the extent approved by the Bankruptcy Court in the Chapter 11 Cases, or (B) incurred by drawing under outstanding letters of credit;
(xi) (A) grant to any moratorium Employee or suspension any member of payment the board of directors (or similar governing body) or consultant any Indebtednessincrease in compensation or benefits other than increases in the ordinary course of business, (B) grant to any Employee or any member of the appointment board of a receiverdirectors (or similar governing body) or consultant any increase in change in control, administrator, liquidator, assignee, trustee severance or other similar official with respect to Sellertermination pay, (C) amend in any material respect or terminate any Assumed Plan or related agreement thereunder or establish, adopt, enter into any plan or related agreement that would be a Benefit Plan if in existence on the date hereof or with respect to any actions taken to terminate and wind-down any Discharged Plan or as otherwise required under the terms of this Agreement, (D) take any action to accelerate the time of vesting, funding or payment of any compensation or benefits under any Assumed Plan or EFH Retirement Plan or related agreement thereunder (or any plan or related agreement that would be an assignment for Assumed Plan if in existence on the benefit of creditors or an admission date hereof); provided that with respect to the Discharged Plans, such actions may be taken that are in writing furtherance of the inability confirmation of Seller to pay its debts as they become duea plan of reorganization or the termination and wind-down of such Discharged Plans, (E) grant any new awards, or any outstanding awards, under any Assumed Plan or related agreement thereunder (or any plan or related agreement that would be an Assumed Plan if in existence on the date hereof), or (DF) enter into or amend any collective bargaining agreement or other thing under any applicable Law relating to bankruptcy agreement with a labor union, works council or insolvency with similar effect as any organization, except in the case of the foregoing clauses (A) through (C);
(xiF) incur for actions required pursuant to the terms of any Indebtedness Benefit Plan, or issue in accordance with the terms and conditions of this Agreement or applicable Law; provided, however, that following the date of this Agreement and notwithstanding anything to the contrary herein, the Company and EFIH may, and may permit any debt securities of their respective Subsidiaries to, hire any individual or warrants or other rights to acquire debt securities of Seller or assume, guarantee or endorseengage any individual, as an accommodation interim employee through a third party staffing agency or otherwiseas an independent contractor or consultant, with such engagements to end in all instances prior to the obligations of any Person Effective Time, to the extent reasonably necessary for Indebtedness or capital obligationsthe Company’s operations, and may, notwithstanding anything contained in this Agreement to the contrary, provide compensation and benefits that, for all such persons as a group, (i) does not exceed $15,000,000 in the case of aggregate in any of annual period and (ii) does not impose any liability on the foregoingreorganized Company and its Subsidiaries following the Closing;
(xii) cancel make or authorize any debts owed to or claims held by Seller capital expenditure in an amount in excess of $35,0001,000,000, in the aggregate, during any 12 month period;
(xiii) abandonmake any material changes with respect to its financial accounting methods, disclaimprinciples, dedicate to the publicpolicies, sellpractices or procedures, assign except as required by Law or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreementby changes in GAAP;
(xiv) disclose make (excluding any confidential elections made (a) in the ordinary course of business or proprietary information (b) under Section 168(k) of the Code) or confidential Business Intellectual Property change any material Tax election, change any material method of Tax accounting, settle or compromise any material Tax liability, claim or assessment or agree to an extension or waiver of the limitation period to any Personmaterial Tax claim or assessment, grant any power of attorney with respect to material Taxes, enter into any closing agreement with respect to any material Tax or refund, amend any material Tax Return, or surrender any right to claim a material Tax Refund of the Company or any of its Subsidiaries, in each case, other than employees of Seller that are subject with respect to a confidentiality any such actions agreed to in connection with any audit or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;
(xvTax proceedings disclosed in Section 6.1(a)(xiv) revalue any of the assets Company Disclosure Letter; provided, however, that the full details of any such actions shall be disclosed to Parent if such actions would result in the Seller, except as required by GAAPinclusion of any material item of income in, or enter intothe exclusion of any material item of deduction from, taxable income for any taxable period (or permit any of portion thereof) ending after the assets of the Seller Closing Date which taxable income was realized (and reflects economic income arising) prior to become bound by any Contract that is or would constitute a Material Contract;
(xvi) (A) change any method of accounting or accounting practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Business;
(xvii) make, revoke or change any Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date;
(xviiixv) modifywaive, amend release, assign, settle or compromise any pending or threatened claim, action, suit or proceeding against the Company or any of its Subsidiaries other than settlements or compromises (A) that would result in the payment by the Company and its Subsidiaries of less than $10,000,000 in the aggregate, and (B) that do not entail the acceptance or imposition of any material restrictions on the business or operations of the Company or its Subsidiaries;
(xvi) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries with a fair market value in excess of $10,000,000 in the aggregate for all such actions, other than (A) sales of obsolete goods or equipment, or (B) cancellation of, abandonment of, allowing to lapse or expire, or the licensing or sublicensing of, material Intellectual Property, in each of (A) and (B), in the ordinary course of business consistent with past practice or in accordance with the Bankruptcy Code or the orders of the Bankruptcy Court; provided, however, that in no event shall the Company or any of its Subsidiaries (other than the Oncor Entities) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any capital stock or other equity interests of any of their respective Subsidiaries other than in connection with the modification, replacement, refunding, renewal, extension or refinancing (subject to clause (v) above) of the DIP Facility;
(xvii) except as permitted by clause (v)(C) above, enter into, terminate (other than at the end of a term), renew or materially extend or amend any Company Material Contract or Contract that, if in effect on the date hereof, would be a Company Material Contract; or waive any material default under, or release, settle or compromise any material claim against the Company or any of its Subsidiaries or liability or obligation owing to the Company or any of its Subsidiaries, under any Company Material Contract or Contract that, if in effect on the date hereof, would be a Company Material Contract, other than pursuant to the expiration Plan of its term other than as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty theretoReorganization;
(xviii) enter into any Contract currently that contains a change of control or similar provision that would require a payment to any Person counterparty thereto in effect or termination release or assign any material rights or claims thereunderconnection with the consummation of the transactions contemplated by this Agreement that would not otherwise be due;
(xix) fail to pay any required maintenance or maintain in full force and effect material insurance policies covering the Company and its Subsidiaries (other similar fees or otherwise fail to make required filings or payments required to maintain than the Oncor Entities) and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandontheir respective properties, let lapse or fail to protect any Owned Intellectual Property;assets and businesses in a form and amount consistent with past practice; or
(xx) commenceagree, settle authorize or compromise commit to do any Proceeding;of the foregoing.
(xxib) cancelNotwithstanding anything in Section 6.1(a) to the contrary, materially reduce the Company and its Subsidiaries may take commercially reasonable actions consistent with prudent industry practices that would otherwise be prohibited pursuant to Section 6.1(a) in order to prevent the occurrence of, or mitigate the existence of, an emergency situation involving endangerment of life, human health, safety or the Environment or the protection of equipment or other assets; provided, however, that the Company shall provide Parent with notice of such emergency situation and any such action taken by the Company or any of its Subsidiaries (other than the Oncor Entities) as soon as reasonably practicable after obtaining Knowledge thereof.
(c) Except for actions required, or specifically permitted, under the terms of this Agreement or the Plan of Reorganization or as required by the Bankruptcy Code or the Bankruptcy Court in the Chapter 11 Cases without any of the Debtors having requested or applied (or having requested that any of their respective Affiliates make such request or application) for the Bankruptcy Court to impose such requirement (and with the Company and EFIH, to the extent requested by Parent prior to such imposition, having used commercially reasonable efforts to challenge such imposition before the Bankruptcy Court), and subject to Sections 6.19 and 6.20, none of Parent, Merger Subs, the Company or EFIH shall intentionally take (or fail to maintain take if required by this Agreement, the Plan of Reorganization, any insurance policy;
Governmental Entity, the Bankruptcy Court, applicable Law or contractual obligation) or permit any of its Subsidiaries to take (xxiior fail to take if required by this Agreement, the Plan of Reorganization, any Governmental Entity, the Bankruptcy Court, applicable Law or contractual obligation) change any action that if taken (or modify the Seller’s credit, collection, failed to be taken) would reasonably be expected to prevent or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) impair in any material respect the consummation of the Closing Date Transactions or fail to pay or delay payment of payables or other Liabilities in any material respect;the Minority Interest Acquisition.
(xxiiid) engage Nothing contained in any transaction with any Related Parties; or
(xxiv) authorize this Agreement is intended to give Parent, directly or enter into any agreementindirectly, commitment the right to control or understanding (whether written or oral) with respect to the foregoing.d
Appears in 1 contract
Interim Operations. (a) From the date hereof of this Agreement until the earlier applicable Closing, except with the prior written consent of the Closing Purchaser (which consent may not be unreasonably withheld, delayed or termination of conditioned), as required or expressly permitted by this Agreement or any other Transaction Agreement, as required by applicable Law or Order, or as expressly set forth on Schedule 5.1, each of the Acquired Company, each Seller and each other member of the Seller Group shall (i) operate conduct the Business and use and/or hold for use the Acquired Assets only in the Ordinary Course and in material compliance with all applicable Laws and Orders; (ii) use Reasonable Efforts to (A) preserve intact the Business and the Acquired Assets, (B) maintain its rights and franchises with respect to the Business and the condition of the Acquired Assets (except for ordinary wear and tear), (C) maintain the Business’ goodwill and existing relationships with customers, suppliers and distributors and any other Persons with whom it has a significant business relationship and (D) perform in all material respects all of its obligations under all Assumed Contracts and Acquired Company Contracts; and (iii) pay all accounts payable of the Business and collect all accounts receivable of the Business only in the Ordinary Course of Business, including maintaining appropriate service levels, and in compliance with applicable Law including any COVID-19 Measures; and (ii) use commercially reasonable efforts to (A) maintain and preserve intact the business organization and goodwill of the Business, the Assets and the Assumed Liabilities, (B) maintain satisfactory relationships with Seller’s clients, operators, distributors, customers, insurance underwriters and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services of, the Business EmployeesCourse.
(b) Without limiting the generality of the foregoing, from the date of this Agreement until the applicable Closing, except as set forth in Section 5.1(b) with the prior written consent of the Disclosure SchedulePurchaser (which consent may not be unreasonably withheld, delayed or conditioned), as required or expressly permitted by this Agreement or any other Transaction Agreement, as approved required by applicable Law or Order, or as expressly set forth in writing the corresponding subsection of Schedule 5.1, the Acquired Company and, only as with respect to the Business, the Sellers and the members of the Seller Group, shall not take any of the following actions:
(i) except as listed on Schedule 5.1(b)(i) or as required by Law or Order or by the terms of any plans, programs or arrangements existing as of the date of this Agreement, or incident to an amendment to any benefit plan or program applicable generally to employees ▇▇▇▇▇, from the date hereof until the earlier of the Closing or the termination of this Agreement, Seller shall not take any action which would require disclosure on Section 2.8 of the Disclosure Schedule or:
(i) take or omit to take any action that results or may reasonably be expected to result in any of the representations and warranties of Seller or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfied;
(ii) amend or otherwise change the organizational documents of Seller;
(iii) (A) authorize, issue, sell or transfer any membership interests or other securities of Seller, (B) adjust, split, combine or reclassify or otherwise amend the terms of any membership interest or other security of Seller, (C) declare, authorize, set aside make or pay any dividend or other distribution (whether in cash, stock or other property) or (D) enter into any agreement with respect to the voting of any equity of Seller;
(iv) (A) merge or consolidate with any other Person, acquire any business or assets of any other Person (whether by merger, stock purchase, asset purchase or other business combination), other than the purchase of supplies in the Ordinary Course of Business or (B) form any new Subsidiary;
(v) (A) materially change the operation of the Business, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of business;
(vi) make any loans, advances or capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of Business);
(vii) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on or otherwise encumber any Assets, other than in the Ordinary Course of Business;
(ix) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur any Indebtedness or issue any debt securities or warrants or other rights to acquire debt securities of Seller or assume, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person for Indebtedness or capital obligations, in the case of any of the foregoing;
(xii) cancel any debts owed to or claims held by Seller in excess of $35,000;
(xiii) abandon, disclaim, dedicate to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreement;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;
(xv) revalue any of the assets of the Seller, except as required by GAAP, or enter into, or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contract;
(xvi) (A) change any method of accounting or accounting practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Business;
(xvii) make, revoke or change any Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date;
(xviii) modify, amend or terminate (other than pursuant to the expiration of its term other than as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunder;
(xix) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property;
(xx) commence, settle or compromise any Proceeding;
(xxi) cancel, materially reduce or fail to maintain any insurance policy;
(xxii) change or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;
(xxiii) engage in any transaction with any Related Parties; or
(xxiv) authorize or enter into any agreement, commitment or understanding (whether written or oral) with respect to the foregoing//▇▇▇.▇▇▇.▇▇▇/Archives/▇▇▇▇▇/data/1002638/000100263816000084/exhibit21.htm 45/134
Appears in 1 contract
Sources: Bill of Sale
Interim Operations. (a) From The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof until and prior to the earlier of the Closing or termination of Effective Time (unless Parent shall otherwise approve in writing, and except as otherwise expressly contemplated by this Agreement) and except as required by applicable Laws, Seller the business of it and its Subsidiaries shall (i) operate the Business only be conducted in the Ordinary Course of Businessordinary and usual course and, including maintaining appropriate service levelsto the extent consistent therewith, it and in compliance with applicable Law including any COVID-19 Measures; and (ii) its Subsidiaries shall use commercially their respective reasonable best efforts to (A) preserve their business organizations substantially intact and maintain and preserve intact the business organization existing relations and goodwill of the Businesswith Governmental Entities, the Assets and the Assumed Liabilitiescustomers, (B) maintain satisfactory relationships with Seller’s clients, operatorssuppliers, distributors, customerscreditors, insurance underwriters lessors, employees and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services of, the Business Employees.
(b) associates. Without limiting the generality of the foregoingforegoing and in furtherance thereof, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required or expressly permitted by this Agreement, (B) as Parent may approve in writing (such approval not to be unreasonably withheld, conditioned or delayed) or (C) as set forth in Section 5.1(b) 6.1 of the Company Disclosure ScheduleLetter, as expressly permitted by this Agreement or as approved in writing by ▇▇▇▇▇, from the date hereof until the earlier of the Closing or the termination of this Agreement, Seller shall Company will not take any action which would require disclosure on Section 2.8 of the Disclosure Schedule orand will not permit its Subsidiaries to:
(i) take adopt or omit to take propose any action that results change in its certificate of incorporation or may reasonably be expected to result in any of the representations and warranties of Seller bylaws or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfiedother applicable governing instruments;
(ii) amend merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly-owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate its assets, operations or businesses or otherwise change the organizational documents of Sellerenter into any hold separate agreement or other agreement imposing material limitations on its business;
(iii) acquire assets or any securities of any business from any other Person in any transaction or series of related transactions, other than (A) authorize, issue, sell or transfer any membership interests or other securities acquisitions pursuant to Contracts in effect as of Sellerthe date of this Agreement, (B) adjust, split, combine or reclassify or otherwise amend capital expenditures made in accordance with capital budgets included in Section 6.1(a)(iii) of the terms of any membership interest or other security of SellerCompany Disclosure Letter, (C) declare, authorize, set aside make acquisitions with a value or pay any dividend or other distribution (whether purchase price in cash, stock or other property) the aggregate of less than $500,000 or (D) enter into any agreement with respect to acquisitions of inventory and other purchases in the voting ordinary course of any equity of Sellerbusiness;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (A) merge other than the issuance of shares by a wholly-owned Subsidiary of the Company to the Company or consolidate with another wholly-owned Subsidiary), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other Person, rights of any kind to acquire any business shares of such capital stock or assets of any other Person (whether by merger, stock purchase, asset purchase such convertible or other business combination)exchangeable securities, other than required issuances of shares of Company Common Stock upon the purchase exercise of supplies in Company Stock Options outstanding as of the Ordinary Course date of Business or (B) form any new Subsidiarythis Agreement;
(v) (A) materially change the operation create or incur any Lien on any assets of the Business, Assets or the Assumed Liabilities Company or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or its Subsidiaries in amounts in excess of $1,000,000 in the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of businessaggregate;
(vi) make any loans, advances or capital contributions to, to or investments in, in any Person (other than advances the Company or any direct or indirect wholly-owned Subsidiary of expenses to Business Employees the Company) in the Ordinary Course excess of Business);
(vii) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on or otherwise encumber any Assets, other than in the Ordinary Course of Business;
(ix) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 100,000 in the aggregate;
(xvii) agree todeclare, request set aside, make or adopt (A) pay any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee dividend or other similar official distribution, payable in cash, stock, property or otherwise, with respect to Seller, any of its capital stock (C) an assignment except for dividends paid by any direct or indirect wholly-owned Subsidiary to the benefit of creditors Company or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under direct or indirect wholly-owned Subsidiary) or enter into any applicable Law relating agreement with respect to bankruptcy or insolvency with similar effect as any the voting of the foregoing (A) through (C)its capital stock;
(xiviii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock;
(ix) incur any Indebtedness indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt securities security of Seller the Company or assumeany of its Subsidiaries, guarantee except for (A) indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices not to exceed $5,000,000 in the aggregate, (B) indebtedness for borrowed money in replacement of existing indebtedness for borrowed money on terms substantially consistent with or endorsemore beneficial than the indebtedness being replaced, (C) guarantees by the Company of indebtedness of wholly-owned Subsidiaries of the Company incurred in compliance with this Section 6.1 or (D) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $5,000,000 of notional debt in the aggregate;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(iii) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $500,000 in the aggregate during any 12 month period;
(xi) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement, other than Contracts that are entered into in the ordinary course of business and do not include any agreement or commitment to take any action described by Sections 6.1
(a) (i) through (x) or Sections 6.1(a)(xii) through (xviii);
(xii) make any changes with respect to accounting policies or procedures, except as required by changes in GAAP;
(xiii) settle any litigation or other proceedings before a Governmental Entity for an accommodation amount in excess of $100,000 in the aggregate (net of insurance coverage) or otherwiseany disputed obligation or liability of the Company in excess of such amount;
(xiv) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts or claims held by it or waive any rights having in each case a value in excess of $500,000 in the obligations aggregate, other than, in each case, in the ordinary course of business;
(xv) make or change any Tax election, change an annual accounting period, file any material amended Tax Return, enter into any material closing agreement, waive or extend any statute of limitation with respect to Taxes, settle or compromise any material Tax liability, claim or assessment, or surrender any right to claim a refund of material Taxes;
(xvi) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Person assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for Indebtedness product sales in the ordinary course of business, sales of obsolete assets or capital obligationssales, leases, licenses or other dispositions of assets with a fair market value not in excess of $500,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreement;
(xvii) except as required pursuant to existing written, binding agreements in effect prior to the date of this Agreement and set forth in Section 5.1(h)(i) of the Company Disclosure Letter, or as otherwise required by applicable Law, (A) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, in the ordinary course of business, (B) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of the foregoing;
its Subsidiaries, except (xii) cancel any debts owed to or claims held by Seller in excess of $35,000;
(xiii) abandon, disclaim, dedicate other than with respect to the publicgrant of new equity awards), sellin the case of employees who are not officers, assign in the ordinary course of business consistent with past practice, (C) establish, adopt, amend or grant terminate any security interest inCompany Benefit Plan or amend the terms of any outstanding equity-based awards, (D) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Benefit Plan, to the extent not already provided in any such Company Benefit Plan, (E) change any actuarial or under any Business Intellectual Property or Business IP Agreement;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property other assumptions used to calculate funding obligations with respect to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof Company Benefit Plan or to other contractors or representatives of Seller who are similarly subject change the manner in which contributions to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with plans are made or the Seller;
(xv) revalue any of the assets of the Sellerbasis on which such contributions are determined, except as may be required by GAAP; or (F) forgive any loans to directors, officers or enter into, employees of the Company or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contract;
(xvi) (A) change any method of accounting or accounting practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Business;
(xvii) make, revoke or change any Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Dateits Subsidiaries;
(xviii) modify, amend take any action or terminate omit to take any action that is reasonably likely to (other than pursuant A) result in any of the conditions to the expiration Merger set forth in Article VIII not being satisfied or (B) prevent or materially delay the consummation of its term other than as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunder;Merger; or
(xix) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandonagree, let lapse or fail to protect any Owned Intellectual Property;
(xx) commence, settle or compromise any Proceeding;
(xxi) cancel, materially reduce or fail to maintain any insurance policy;
(xxii) change or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;
(xxiii) engage in any transaction with any Related Parties; or
(xxiv) authorize or enter into commit to do any agreement, commitment or understanding (whether written or oral) with respect to of the foregoing.
(b) Parent shall not knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to (i) result in any of the conditions to the Merger set forth in Article VII not being satisfied or (ii) prevent or materially delay the consummation of the Merger.
Appears in 1 contract
Interim Operations. (a) From the date hereof of this Agreement and until the Effective Time or the earlier of the Closing or termination of this Agreement in accordance with its terms (the “Pre-Closing Period”), except (w) as set forth in SECTION 4.1(a) of the Company Disclosure Letter, (x) as expressly required by this Agreement, Seller (y) to the extent consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned) or (iz) operate as required by applicable Law, the Business only Company shall, and shall cause its Subsidiary to conduct the business of it and its Subsidiary in the Ordinary Course ordinary course of Businessbusiness in all material respects and, including maintaining appropriate service levelsto the extent consistent therewith, it shall, and in compliance with applicable Law including any COVID-19 Measures; and (ii) shall cause its Subsidiary to, use their commercially reasonable efforts to (A) preserve their business organizations intact, maintain their assets and preserve intact the business organization properties and their relationships and goodwill of the Businesswith Governmental Entities, the Assets and the Assumed Liabilitiescustomers, (B) maintain satisfactory relationships with Seller’s clients, operatorssuppliers, distributors, customers, insurance underwriters employees and other third parties Persons having business dealings with Seller, (C) pay the Company or its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations withSubsidiary, and keep available the services ofof its current officers, key managers and other employees and consultants, all as necessary to conduct their business in the ordinary course; provided, however, for the avoidance of doubt, the Business Employees.
(b) Without limiting Company shall in no event be required to increase compensation to employees or consultants or pay any special bonuses in connection with the foregoing. Notwithstanding the generality of the foregoing, except as and subject to the exceptions set forth in Section 5.1(bclauses (w), (x), (y) and (z) of the Disclosure Scheduleimmediately preceding sentence, as expressly permitted by this Agreement or as approved in writing by ▇▇▇▇▇the Company shall not, from the date hereof until the earlier of the Closing or the termination of this Agreement, Seller and shall not take any action which would require disclosure on Section 2.8 of the Disclosure Schedule orpermit its Subsidiary to:
(i) take amend, supplement or omit modify (A) the certificate of incorporation or bylaws (or comparable formation and governing documents) of the Company or its Subsidiary or (B) any policy related to take Personal Data or the operation or security of any action that results or may reasonably be expected to result material IT Assets in any of manner that would materially weaken the representations and warranties of Seller security or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfiedprotection thereof;
(ii) amend acquire any equity interests in, or otherwise change assets of any business or division (whether by merger, consolidation or otherwise) from, any other Person (other than the organizational documents Company or its Subsidiary of Sellerthe Company), except for purchases of inventory, services, products or materials in the ordinary course of business;
(iii) (A) authorize, issue, sell or transfer any membership interests or other securities of Seller, (B) adjust, split, combine or reclassify or otherwise amend the terms of any membership interest or other security of Seller, (C) declare, authorize, set aside make or pay any dividend or other distribution (whether in cash, stock or other property) or (D) enter into any agreement with respect to the voting of any equity of Seller;
(iv) (A) merge or consolidate with any other PersonPerson or restructure, acquire reorganize, dissolve, wind-up or completely or partially liquidate the Company or its Subsidiary or take any business similar action;
(iv) issue, sell, pledge, dispose of, or assets subject to any Lien, any Equity Interests, except for issuances of any other Person (whether by merger, stock purchase, asset purchase or other business combination), other than Shares pursuant to Company Stock Options outstanding on the purchase date of supplies in this Agreement under the Ordinary Course of Business or (B) form any new SubsidiaryStock Incentive Plans;
(v) split, combine, subdivide, recapitalize, reclassify or effect any similar change in capitalization of any of the Equity Interests;
(vi) declare, accrue, set aside, establish a record date for, or pay any dividends on, or make any other distributions in respect of, the Equity Interests of the Company (other than those paid in cash prior to the Reference Time);
(vii) repurchase, redeem or otherwise acquire any of the Equity Interests, except for redemptions, purchases or acquisitions pursuant to the exercise or settlement of Company Stock Options or the exercise of any contractual repurchase rights existing on the date of this Agreement;
(viii) incur, suffer to exist, guarantee or otherwise become liable with respect to any Indebtedness, except for short term working capital borrowings incurred in the ordinary course of business under the Credit Facilities;
(ix) divest, sell, convey or transfer, or create or incur any Lien (other than Permitted Liens) on, any of the assets of the Company or its Subsidiary, other than sales of products or non-exclusive licenses granted by the Company or its Subsidiary in the ordinary course of business;
(x) (A) materially increase in any respect the compensation or benefits of any (1) Company Employee other than as expressly required pursuant to applicable Law or the terms of Company Plans in effect on the date of this Agreement that are set forth in SECTION 4.1(a)(x)(A) of the Company Disclosure Letter or (2) Company Employees (other than any Company Employee whose salary is equal to or less than $100,000 in the ordinary course of business consistent with past practice), (B) establish, adopt, enter into, modify, supplement, amend or terminate any Company Plan or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Plan if it were in existence as of the date of this Agreement (other than as expressly required by the terms of any Company Plan as in effect on the date of this Agreement that has been made available to Parent), (C) take any action to accelerate the vesting or payment of or to fund any benefit or payment to any Company Employee, except as contemplated pursuant to SECTION 2.4 of this Agreement or (D) pay or agree to pay any pension, retirement allowance or other employee benefit, including any severance, change in control, retention, transaction or termination payment to any Company Employee other than those included as Transaction Expenses (as contemplated pursuant to SECTION 4.7(d) of this Agreement) as required by law or pursuant to the terms of Company Plans in effect on the date of this Agreement that are set forth in SECTION 4.1(a)(x)(D)(2) of the Company Disclosure Letter, (E) grant any equity or equity-based awards to, or discretionarily accelerate the vesting or payment of any such awards held by any Company Employee, (F) hire any executive-level employee or (G) terminate any executive-level employee other than for cause;
(xi) other than in the ordinary course of business, make, change or revoke any Tax election, file any amended Tax Return, settle or compromise any Tax liability, enter into any closing agreement with respect to any Tax or surrender any right to claim a Tax refund, consent to any extension or waiver of the limitation period applicable to any Taxes, or change the operation Company’s or its Subsidiary’s method of accounting for Tax purposes, unless required by applicable Law;
(xii) except as required by GAAP or applicable Law, make any changes to its accounting policies or principles;
(A) other than in the ordinary course of business, enter into any Contract that would have been a Company Material Contract pursuant to SECTION 3.1(q)(i) had it been entered into prior to the date of this Agreement or (B) terminate, or materially amend, or waive any material rights under, any Company Material Contract, except for any such termination upon the expiration of such Company Material Contract in accordance with its terms; provided in each case that the Company and its Subsidiary shall be permitted to extend, renew or replace any Company Material Contract with one or more Contracts on substantially similar terms;
(xiv) except for the capital expenditures expressly approved in the Company capital expenditures budget set forth in SECTION 4.1(a)(xiv) of the BusinessCompany Disclosure Letter, Assets make or authorize any capital expenditure;
(xv) except (A) as provided in SECTION 4.17 or (B) with respect to the Assumed Liabilities settlement of an Action if such settlement imposes no liability or obligation on the Company other than the payment of money damages that do not exceed the amounts accrued in connection with the MSA Litigation on the unaudited consolidated balance sheet of the Company and its Subsidiary as of March 31, 2017 with respect to such Action, or $15,000 individually or $45,000 in the aggregate with respect to other Actions, (1) cancel, compromise, settle or agree to settle any material claims, (2) waive or release any material right with respect to any Action or (3) commence or settle any Action;
(xvi) (A) delay or postpone any payment of any accounts payable or other payables or expenses from the date such payments would be made consistent with past practice, (B) accelerate or delay the collection of accounts receivable in advance of or beyond the date when the same would have been collected in the ordinary course of business or (C) make any material change in the conduct of its business, or any method material change in the methods of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms operation of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of its business;
(vixvii) invest in, make any loans, advances or capital contributions to, or investments inotherwise acquire the securities or other equity interests of, any Person (other than advances that is not a Subsidiary of expenses to Business Employees in the Ordinary Course of Business)Company;
(viixviii) form any new Subsidiary;
(xix) (A) institute cancel or announce any increase in the compensation, bonuses or other benefits payable fail to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on or otherwise encumber any Assets, other than in the Ordinary Course of Business;
(ix) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as renew any of the foregoing (A) through (C);
(xi) incur any Indebtedness Company Insurance Policies or issue any debt securities or warrants or other rights fail to acquire debt securities maintain commercially reasonable levels of Seller or assume, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person for Indebtedness or capital obligations, in the case of any of the foregoing;
(xii) cancel any debts owed to or claims held insurance coverage provided by Seller in excess of $35,000;
(xiii) abandon, disclaim, dedicate to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreement;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;
(xv) revalue any of the assets of the Seller, except as required by GAAP, or enter into, or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contract;
(xvi) (A) change any method of accounting or accounting practice, other than changes required under applicable Law or GAAP Company Insurance Policies or (B) fail to maintain its insurance coverage, pay premiums, and report claims to the Seller’s books, accounts and records in the Ordinary Course of Businessinsurance carrier upon their occurrence;
(xviixx) makeact, revoke or change fail to act, in any Tax election manner that would (A) reasonably be expected to result in any loss, lapse, abandonment, invalidity or unenforceability of any material Intellectual Property owned or purported to be owned by Seller that could adversely impact the amount of Taxes due Company or payable its Subsidiary, or (and/or B) cause the Company or its Subsidiary to be obligated to place any direct or indirect owner of equity interests proprietary source code in Buyer) after the Closing Dateescrow;
(xviii) modify, amend or terminate (other than pursuant to the expiration of its term other than as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunder;
(xixxxi) fail to pay any required maintenance or other similar fees or otherwise fail creditor any material amount owed to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property;
(xx) commence, settle or compromise any Proceeding;
(xxi) cancel, materially reduce or fail to maintain any insurance policysuch creditor when due;
(xxii) change or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;
(xxiii) engage in any transaction with any Related Parties; or
(xxiv) authorize or enter into any agreement, commitment arrangement or understanding transaction with any of their respective directors, officers, or Stockholders (whether written or oralwith any relative, beneficiary, spouse or Affiliate of such Persons); or
(xxiii) with respect agree, authorize, resolve, commit or consent to do any of the foregoing.
(b) Nothing contained in this Agreement is intended to give Parent or Merger Sub, directly or indirectly, the right to control or direct the Company’s operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiary’ respective operations.
Appears in 1 contract
Interim Operations. (a) From The Company covenants and agrees as to itself and its Subsidiaries that, from and after the date hereof until the earlier of the Closing or termination execution of this Agreement, Seller Agreement and prior to the Effective Time (unless Parent shall otherwise approve in writing and except as (i) operate the Business only in the Ordinary Course of Businessrequired by applicable Law, including maintaining appropriate service levels, and in compliance with applicable Law including any COVID-19 Measures; and (ii) expressly required by this Agreement or (iii) otherwise expressly disclosed in Section 6.1 of the Company Disclosure Letter), the Company shall use its commercially reasonable efforts to (A) maintain conduct its business and preserve intact the business organization of its Subsidiaries in the ordinary course of business consistent with past practice and goodwill of the Business, the Assets and the Assumed Liabilities, (B) maintain satisfactory relationships with Seller’s clients, operators, distributors, customers, insurance underwriters the status of the Company as a “real estate investment trust” within the meaning of Sections 856 through and other third parties having business dealings with Seller, including 860 of the Code (Ca “REIT”) pay its debts and Taxes when due (subject for all taxable periods ending on or prior to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services of, the Business Employees.
(b) Closing Date. Without limiting the generality of of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the Effective Time, except as set forth (w) required by applicable Law, (x) Parent may approve in writing (such approval not to be unreasonably withheld, conditioned or delayed with respect to clauses (d), (f), (h), (i), (m), (n), (p), (r) or (s)), (y) expressly disclosed in Section 5.1(b) 6.1 of the Company Disclosure Schedule, as Letter or (z) expressly permitted by this Agreement or as approved provided for in writing by ▇▇▇▇▇, from the date hereof until the earlier of the Closing or the termination of this Agreement, Seller the Company shall not take and will not permit any action which would require disclosure on Section 2.8 of the Disclosure Schedule orits Subsidiaries to:
(a) (i) take amend, supplement or omit to take any action that results otherwise modify its articles of incorporation or may reasonably be expected to result in any of the representations and warranties of Seller bylaws (or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfied;
comparable governing documents), (ii) amend split, combine, subdivide or otherwise change reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned Subsidiary of the organizational documents Company which remains a wholly owned Subsidiary after consummation of Seller;
such transaction), (iii) (A) authorize, issue, sell or transfer any membership interests or other securities of Seller, (B) adjust, split, combine or reclassify or otherwise amend the terms of any membership interest or other security of Seller, (C) declare, authorize, set aside make or pay any dividend or other distribution (whether payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (other propertythan (A) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company (other than a Taxable REIT Subsidiary) to another direct or indirect wholly owned Subsidiary of the Company or to the Company, (B) regular quarterly cash dividends not to exceed $0.15 per Share, with customary record and payment dates on the Shares in accordance with past practice (including, for the avoidance of doubt, any dividends or distributions declared and publicly announced on or prior to the date hereof), (C) any distributions of the Company and its Subsidiaries, including under Sections 857, 858 or 860 of the Code, as may be reasonably necessary to (I) maintain the status of the Company as a REIT or (II) avoid or reduce the imposition of any corporate level Tax or excise Tax under the Code and (D) dividend equivalents payable upon the vesting or settlement of Company Director-Granted RSUs, Company Service-Based RSUs and Company Market-Based RSUs), (iv) enter into any agreement with respect to the voting of its capital stock or (v) purchase, repurchase, redeem or otherwise acquire any equity shares of Sellerits capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock, other than (A) pursuant to the cashless exercise of Company Options or the forfeiture of, or withholding of Taxes with respect to, Company Options, Company Director-Granted RSUs, Company Service-Based RSUs or Company Market-Based RSUs in connection with any Taxable event related to such awards, in each case, in accordance with past practice and with the terms of the applicable Company Stock Plan as in effect on the date of this Agreement or (B) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company;
(iv) (Ab) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate;
(i) except as required by the terms of a Company Plan, (A) increase the compensation or benefits payable to any current or former employee, director or individual service provider of the Company or any of its Subsidiaries with an annual base salary greater than $100,000, (B) materially increase the compensation or benefits payable to any current or former employee, director or individual service provider of the Company or any of its Subsidiaries with an annual base salary less than $100,000 or (C) become a party to, establish, adopt, amend, or make any change to any Company Plan or any arrangement that would have been a Company Plan had it been entered into prior to the date of this Agreement, other than related to annual plan renewals in the ordinary course of business or (ii) grant or make any bonus or other payment to any employee, director, executive officer or individual service provider of the Company or its Subsidiaries;
(d) hire any employees with an annual base salary greater than $100,000, other than any non-officer employees that are hired to replace any employees that were terminated or that resigned and that are provided total compensation and benefits substantially similar, in the aggregate, to the terminating employees being replaced;
(e) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (i) in the ordinary course of business consistent with past practice, borrowings under the Existing Credit Facilities as in effect as of the date hereof, (ii) inter-company Indebtedness among the Company and its wholly owned Subsidiaries, (iii)(A) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (B) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business or (iv) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice and not for speculative purposes; provided, that the Company and its Subsidiaries shall use commercially reasonable efforts to mitigate any material increase in their respective aggregate exposure to currency risk;
(f) make or commit to any capital expenditures other than in the ordinary course of business consistent with past practice and which do not exceed the amounts per line item reflected in the Company’s monthly capital expenditure projections for 2020 (pro-rated for any partial months during such period), which have previously been made available to Parent;
(g) other than with respect to (i) Contracts related to any REO Properties and (ii) other Company Properties that are set forth in Section 6.1(g) of the Company Disclosure Letter, in each case so long as such transactions are on bona fide, commercial, arms’ length terms to an unaffiliated party, transfer, lease (other than renewals and single-family home leases with tenants in the ordinary course of business consistent with past practice), license, sell, assign, mortgage, pledge, place a Lien (other than Permitted Liens) upon or otherwise dispose of any properties or assets (including capital stock of any of its Subsidiaries but not including any Intellectual Property), (x) with a fair market value in excess of $200,000 individually or $2,000,000 in the aggregate (other than transactions among the Company and its wholly owned Subsidiaries) but for the avoidance of doubt subject in all respects to the additional restrictions of Section 6.15(a) with respect to Subject Company Properties, (y) that secure any of the Existing Credit Facilities other than to the extent the disposition thereof is permitted by the relevant Existing Credit Facility but for the avoidance of doubt subject in all respects to the additional restrictions of Section 6.15(a) with respect to Subject Company Properties, or (z) that would reasonably be expected to interfere with Merger Sub’s ability to obtain the Debt Financing; provided, that other than with respect to properties or assets referred to in clauses (i) and (ii) above, the Company shall promptly (and in any event within twenty-four (24) hours) deliver to Parent written notice of any license, sale, assignment, mortgage, pledge, or other disposition of any Company Properties;
(h) issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (i) for any Shares issued pursuant to Company Options, Company Director-Granted RSUs, Company Service-Based RSUs and Company Market-Based RSUs outstanding on the date of this Agreement in accordance with the terms of such awards and the Company Stock Plans, and (ii) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company;
(i) other than pursuant to the agreements forth in Section 6.1(i) of the Company Disclosure Letter, acquire any business or assets of any or other Person (property, whether by merger, stock purchaseconsolidation, asset purchase or other business combination), other than the purchase of supplies in the Ordinary Course of Business property or (B) form any new Subsidiaryassets or otherwise;
(vj) make any material change with respect to its financial accounting policies or procedures, except as required by changes in GAAP (A) materially change the operation of the Business, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion interpretation thereof) or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or by applicable Law;
(Bk) enter into a any new line of business or abandon or discontinue an existing start to conduct a line of businessbusiness of the Company or any of its Subsidiaries that is not conducted as of the date of this Agreement;
(vil) make any loans, advances or capital contributions to, or investments in, any Person (other than loans, advances or capital contributions to the Company or any direct or indirect wholly owned Subsidiary of expenses to Business Employees in the Ordinary Course of BusinessCompany);
(viii) amend or modify in any material respect or terminate (excluding terminations upon expiration of the term thereof or upon default by any other party thereto, in each case, in accordance with the terms thereof) any Material Contract or waive, release or assign any material rights, claims or benefits under any Material Contract or take (or fail to take) any action that would reasonably be expected to cause or result in a material breach of, or material default under, any Material Contract or (ii) enter into any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement unless it is on terms substantially consistent with, or on terms more favorable to the Company or its Subsidiaries (and to Parent and its Subsidiaries following the Closing) than, either a Contract it is replacing or a form of such Material Contract made available to Parent prior to the date hereof; provided, this Section 6.1(m) shall not prohibit or restrict any action in respect of (A) Company Plans or (B) the Existing Lender Consents (as defined in Section 6.1(m) of the Company Disclosure Letter);
(n) (A) institute settle any Proceeding before or announce threatened in writing to be brought before a Governmental Entity, other than settlements if the amount of any increase such settlement is not in excess of $250,000 individually or $1,000,000 in the compensationaggregate; provided, bonuses that such settlements do not involve any non-de minimis injunctive or other benefits payable to any Business Employees, equitable relief or impose non-de minimis restrictions on the business activities of the Company and its Subsidiaries or Parent and its Subsidiaries or (B) waive any material right with respect to any material claim held by the Company or any of its Subsidiaries;
(o) enter intointo any collective bargaining agreement or recognize or certify any labor union, labor organization or other employee representative body as the bargaining representative for any employees of the Company or any of its Subsidiaries;
(p) make, change or revoke any material Tax election or change a material method of Tax accounting, amend any material Tax Return, settle or waive compromise any rights under material Tax liability, audit, proceeding, claim or assessment, enter into any employmentTax allocation, consulting, severance sharing or change of control indemnity agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for causecustomary provisions in agreements or arrangements the primary subject of which is not Taxes), enter into any closing agreement in respect of material Taxes, seek or request any material Tax ruling from a Governmental Entity, file any material Tax Return inconsistent with past practice other than as required by applicable Law or contribute any assets to a Taxable REIT Subsidiary (other than any assets that are expected to be sold prior to the Closing Date and are otherwise permitted to be sold prior to the Closing Date pursuant to the terms of this Agreement);
(viiiq) transfertake any action, leaseor fail to take any action, licensewhich action or failure to act would reasonably be expected to cause (i) the Company to fail to qualify as a REIT or (ii) any other Subsidiary of the Company to fail to preserve its status as set forth in Section 5.1(b)(iv) of the Company Disclosure Letter;
(r) terminate, guaranteecancel or make any material changes to the structure, limits or terms and conditions of any of its insurance policies, including allowing the policies to expire without renewing such policies or obtaining comparable replacement coverage, or prejudicing rights to insurance payments or coverage;
(s) sell, mortgageassign, pledgetransfer or exclusively license any material Intellectual Property owned by the Company or any of its Subsidiaries, dispose or permit the lapse of any right, title or incur interest to any Lien on or otherwise encumber such material Intellectual Property, including any Assetsmaterial Registered IP, in each case, other than in the Ordinary Course ordinary course of Businessbusiness;
(ixt) acquire take any real property or undertake of the actions set forth on Section 6.1(t) of the Company Disclosure Letter; or
(u) agree, resolve or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur any Indebtedness or issue any debt securities or warrants or other rights to acquire debt securities of Seller or assume, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person for Indebtedness or capital obligations, in the case of do any of the foregoing;
(xii) cancel . Notwithstanding the foregoing, nothing in this Section 6.1 shall prohibit the Company or any debts owed of its Subsidiaries from taking any action or refraining from taking any action, at any time or from time to time, that in the reasonable judgment of the board of directors of the Company, upon written advice of nationally recognized REIT Tax counsel, is reasonably necessary for the Company to avoid incurring entity-level U.S. federal income or claims held by Seller in excess of $35,000;
(xiii) abandon, disclaim, dedicate U.S. federal excise Taxes under the Code or to maintain its qualification as a REIT for any period or portion thereof ending on or prior to the publicEffective Time, sell, assign including making dividend or grant any security interest in, other distribution payments to or under any Business Intellectual Property or Business IP Agreement;
stockholders of the Company in accordance with this Agreement (xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or the restrictions set forth in Section 6.1(a)(iii)); provided, that prior to other contractors or representatives taking any such action, the Company and its Subsidiaries shall inform Parent in writing of Seller who are similarly subject such action and shall consult with and cooperate with Parent in good faith to minimize the adverse effect of such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;
(xv) revalue any of the assets of the Seller, except as required by GAAP, or enter into, or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contract;
(xvi) (A) change any method of accounting or accounting practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Business;
(xvii) make, revoke or change any Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date;
(xviii) modify, amend or terminate (other than pursuant action to the expiration of its term other than as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunder;
(xix) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain Company and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property;
(xx) commence, settle or compromise any Proceeding;
(xxi) cancel, materially reduce or fail to maintain any insurance policy;
(xxii) change or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;
(xxiii) engage in any transaction with any Related Parties; or
(xxiv) authorize or enter into any agreement, commitment or understanding (whether written or oral) with respect to the foregoingParent.
Appears in 1 contract
Interim Operations. (a) From and after the date hereof until hereof, the earlier of the Closing or termination of this Agreement, Seller shall (i) operate cause the Business only Company and its Subsidiaries to conduct their respective businesses in the Ordinary Course of Business, ordinary course consistent with past practice (including maintaining appropriate service levels, but not limited to in relation to sale practices and in compliance with applicable Law including any COVID-19 Measures; accounting practices) and (ii) use their commercially reasonable efforts to (A) maintain and preserve intact the business organization assets, properties and goodwill of the Business, the Assets and the Assumed Liabilities, (B) maintain satisfactory relationships with Seller’s clients, operators, distributors, customers, insurance underwriters Employees and other third parties having material business dealings with Seller, (C) pay the Company and its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services of, the Business Employees.
(b) Subsidiaries. Without limiting the generality of the foregoing, except (a) as set forth in Section 5.1(b) of the Disclosure Schedule, as expressly permitted otherwise required by this Agreement or as Agreement, (b) for actions approved in writing by ▇▇▇▇▇the Purchaser (which approval shall not be unreasonably withheld, conditioned or delayed), (c) as required to comply with applicable Law or (d) as described in the Disclosure Letter, from and after the date hereof until hereof, the earlier Seller shall cause the Company and its Subsidiaries not to take any of the Closing or the termination of this Agreement, Seller shall not take any action which would require disclosure on Section 2.8 of the Disclosure Schedule orfollowing actions:
(i) take or omit to take adopt any action that results or may reasonably be expected to result change in any of the representations and warranties of Seller or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfiedits constitution;
(ii) amend adopt a plan or otherwise change the organizational documents agreement of Sellercomplete or partial liquidation, dissolution, restructuring, merger, consolidation, restructuring, recapitalization or other reorganization;
(iii) (A) authorize, issue, sell sell, transfer, pledge, dispose of or transfer encumber the Shares or any membership other equity or similar interests of the Company or other securities any of Seller, its Subsidiaries or (B) adjustgrant any option, splitwarrant or other right to purchase or obtain, combine or reclassify or otherwise amend dispose of or encumber, the terms Shares or any other equity or similar interests of the Company or any membership interest or other security of Seller, (C) declare, authorize, set aside make or pay any dividend or other distribution (whether in cash, stock or other property) or (D) enter into any agreement with respect to the voting of any equity of Sellerits Subsidiaries;
(iv) (A) merge enter into or consolidate with consummate any transaction involving the acquisition of the business, stock, assets or other Person, acquire any business or assets properties of any other Person (whether by mergerfor consideration in excess of $100,000 individually, stock purchase, asset purchase or other business combination), other than the purchase of supplies $1,000,000 in the Ordinary Course of Business or (B) form any new Subsidiaryaggregate;
(v) sell, lease, license, transfer, exchange or swap, mortgage or otherwise encumber, or subject to any Encumbrance (other than Permitted Encumbrance) or otherwise dispose of any material portion of its material properties or assets with a value or purchase price in the aggregate in excess of $500,000 other than (A) materially change in the operation ordinary course of business, (B) pursuant to existing agreements in effect prior to the Businessdate hereof, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes (C) as may be required to comply with any by applicable Law or any Governmental Authority in order to permit or facilitate the terms consummation of the transactions contemplated by this Agreement Agreement, (D) dispositions of obsolete or worthless assets or (E) transactions among the Company and/or any of its Subsidiaries;
(vi) incur, assume, guarantee, prepay or otherwise become liable for any Indebtedness, other than (A) in the ordinary course of business, (B) any Indebtedness among the Company and/or any of its Subsidiaries, (C) guarantees by the Company of Indebtedness of its Subsidiaries, and (D) Indebtedness incurred pursuant to agreements in effect prior to the execution of this Agreement;
(vii) enter any Contract pursuant to which the Company or any of its Subsidiaries will be liable to pay amounts in excess of $100,000 or receive amounts in excess of $250,000 individually within a 12-month period;
(viii) enter into, renew, amend or modify in any material respect, or terminate any Material Contract, other than in the ordinary course of business; provided, however, that nothing in this Agreement shall prevent the Company or its Subsidiaries from entering into employment agreements or severance agreements, in each case, with employees in the ordinary course of business;
(ix) incur or commit to any capital expenditures other than capital expenditures incurred or committed in the ordinary course of business, or enter into a any new line of business or abandon or discontinue an existing line of business;
(vi) make any loans, advances or capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of Business);
(viix) (A) institute make, change or announce revoke any increase in the compensation, bonuses or other benefits payable to any Business Employeesmaterial Tax election, (B) enter into, amend file any material amended Tax Return or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant settle or compromise any severance material liability for Taxes or termination pay (cash, equity or otherwise) to surrender any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than material claim for cause);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose a refund of or incur any Lien on or otherwise encumber any Assets, other than in the Ordinary Course of Business;
(ix) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C)Taxes;
(xi) incur materially change its financial accounting policies or procedures or any Indebtedness or issue any debt securities or warrants of its methods of reporting income, deductions or other rights to acquire debt securities of Seller or assume, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person material items for Indebtedness or capital obligations, in the case of any of the foregoing;
(xii) cancel any debts owed to or claims held by Seller in excess of $35,000;
(xiii) abandon, disclaim, dedicate to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreement;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;
(xv) revalue any of the assets of the Sellerfinancial accounting purposes, except as required by GAAP, the Australian Financial Reporting Standards or enter into, or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contract;
(xvi) (A) change any method of accounting or accounting practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Business;
(xvii) make, revoke or change any Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date;
(xviii) modify, amend or terminate (other than pursuant to the expiration of its term other than as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunder;
(xix) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property;
(xx) commence, settle or compromise any Proceeding;
(xxi) cancel, materially reduce or fail to maintain any insurance policy;
(xxii) change or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;
(xxiii) engage in any transaction with any Related PartiesLaw; or
(xxivxii) authorize authorize, or enter into agree or commit to do, whether in writing or otherwise, any agreement, commitment or understanding (whether written or oral) with respect to of the foregoing.
Appears in 1 contract
Sources: Equity Purchase Agreement (Primus Telecommunications Group Inc)
Interim Operations. (a) From Except (x) for the date hereof until operations covered by the earlier of AFEs described in Exhibit 4.1(h), the Closing or termination of this operations set forth in the Side Letter Agreement, or such operations required pursuant to any Applicable Contract, applicable Law or Lease, (y) as required in the event of an emergency to protect life, property or the environment, and (z) as expressly contemplated by this Agreement or as expressly consented to in writing by Buyer (which consent shall not be unreasonably delayed, withheld or conditioned), Seller shall shall, from and after the Execution Date until Closing:
(i) as to Properties operated by CPX or its Affiliates, continue the operation of the Properties in the ordinary course of business, or, as to Properties where CPX or an Affiliate of CPX is not the operator, continue its actions as a non-operator in the ordinary course of business;
(ii) subject to interruptions resulting from force majeure, mechanical breakdown and planned maintenance, in each case, operate the Business only in the Ordinary Course of Business, including maintaining appropriate service levels, and Properties in compliance with all applicable Law including any COVID-19 MeasuresLaws and the terms of all Leases and Applicable Contracts;
(iii) maintain, or cause to be maintained, the books of account and Records relating to the Properties in the usual, regular and ordinary manner and in accordance with the usual accounting practices of Seller; and and
(iiiv) to the extent Seller has Knowledge thereof, use commercially reasonable efforts to (A) maintain and preserve intact the business organization and goodwill timely inform Buyer of all matters it considers in good faith to be material developments affecting any of the Business, the Assets and the Assumed Liabilities, (B) maintain satisfactory relationships with Seller’s clients, operators, distributors, customers, insurance underwriters and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services of, the Business EmployeesProperties.
(b) Without limiting Except (x) for the generality of operations covered by the foregoingAFEs described in Exhibit 4.1(h), except as the operations set forth in Section 5.1(bthe Side Letter Agreement, or such operations required pursuant to any Applicable Contract, applicable Law or Lease, (y) as required in the event of an emergency to protect life, property or the Disclosure Scheduleenvironment, and (z) as expressly permitted contemplated by this Agreement or as approved expressly consented to in writing by ▇▇▇▇▇Buyer (which consent shall not be unreasonably delayed, from the date hereof until the earlier of the Closing withheld or the termination of this Agreementconditioned), Seller shall not take any action which would require disclosure on Section 2.8 of not, from and after the Disclosure Schedule orExecution Date until Closing:
(i) take sell or omit to take otherwise dispose of any action that results or may reasonably be expected to result in any portion of the representations Properties except for sales or other dispositions of (1) Hydrocarbons in the ordinary course of business after production, or (2) equipment and warranties other personal property or fixtures in the ordinary course of Seller or business where the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any same has become obsolete, is otherwise no longer necessary for the operation of the conditions set forth herein not being satisfiedProperties, or is replaced by an item or items of at least equal suitability;
(ii) affirmatively terminate any Material Contract or materially amend or otherwise change the organizational documents terms of Sellerany Material Contract;
(iii) (A) authorize, issue, sell or transfer any membership interests or other securities of Seller, (B) adjust, split, combine or reclassify or otherwise amend the terms of any membership interest or other security of Seller, (C) declare, authorize, set aside make or pay any dividend or other distribution (whether in cash, stock or other property) or (D) enter into any an agreement with respect to that, if in existence on the voting of any equity of Seller;
(iv) (A) merge or consolidate with any other Person, acquire any business or assets of any other Person (whether by merger, stock purchase, asset purchase or other business combination), other than the purchase of supplies in the Ordinary Course of Business or (B) form any new Subsidiary;
(v) (A) materially change the operation of the Business, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may Execution Date would be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of business;
(vi) make any loans, advances or capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of Business);
(vii) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on or otherwise encumber any Assets, other than in the Ordinary Course of Business;
(ix) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur any Indebtedness or issue any debt securities or warrants or other rights to acquire debt securities of Seller or assume, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person for Indebtedness or capital obligations, in the case of any of the foregoing;
(xii) cancel any debts owed to or claims held by Seller in excess of $35,000;
(xiii) abandon, disclaim, dedicate to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreement;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;
(xv) revalue any of the assets of the Seller, except as required by GAAP, or enter into, or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contract;
(xviiv) (A) change affirmatively release, terminate or materially amend any method of accounting Lease, Easement, permit or accounting practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Businesslicense;
(xviiv) make, revoke incur any indebtedness or change take or fail to take any Tax election by Seller action that could adversely impact would cause a lien or encumbrance to arise or exist on the amount of Taxes due Properties or payable otherwise allow a lien (and/or other than Permitted Encumbrances) to attach to or encumber the Properties or any direct or indirect owner of equity interests in Buyer) after the Closing Dateportion thereof;
(xviiivi) modifygrant or create any Preferential Right, amend transfer restriction or terminate (other than pursuant to the expiration of its term other than as a result of any action taken by Sellersimilar right, obligation, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunder;
(xix) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property;
(xx) commence, settle or compromise any Proceeding;
(xxi) cancel, materially reduce or fail to maintain any insurance policy;
(xxii) change or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;
(xxiii) engage in any transaction with any Related Parties; or
(xxiv) authorize or enter into any agreement, commitment or understanding (whether written or oral) requirement with respect to the foregoingProperties; and
(vii) except for the commitments set forth in Exhibit 4.1(h), all of which are deemed to be approved, approve or propose any operations on the Properties anticipated to cost the owner of the Properties more than $50,000 per operation or activity net to Seller’s or any of its Affiliate’s interest.
(c) Buyer acknowledges that Seller is currently, and from the date hereof will continue to, conduct certain operations required in order to perpetuate the Leases and extend its rights under the Farmout Agreement and, notwithstanding anything in this Section 6.3, but subject to Section 6.3(d) to the contrary, all activities and actions of Seller taken in connection therewith are deemed authorized by Buyer, without further consultation, and regardless of whether such activities and actions are in the ordinary course of business.
(d) With the exception of the operations and activities set forth on Exhibit 4.1(h) and the operations and activities set forth in the Side Letter Agreement, which shall be deemed authorized by Buyer without further consultation, should Seller receive (or desire to make) any proposals to drill additional ▇▇▇▇▇ on the Oil and Gas Properties, or to conduct other operations which require consent of non-operators under an applicable operating agreement, Seller will notify Buyer of, and consult with Buyer concerning, such proposals, provided that in the event Seller and Buyer cannot come to an agreement on any such proposal, any decisions with respect to such proposal shall be made by Seller in its sole discretion. From and after the Effective Date, any proposed activities other than those set forth on Exhibit 4.1(h) or in the Side Letter Agreement shall be subject to Buyer’s prior written consent. The Parties hereby recognize that the current ownership and operation of the Properties may include Seller electing not to participate (i.e., non-consent status) in ▇▇▇▇▇ drilled pursuant to an operating agreement, joint exploration agreement or spacing order relating to the Properties and that Seller may continue to make consistent elections for such Properties, provided, however, Seller will provide Buyer with notice of such election. For the avoidance of doubt, subject to the Side Letter Agreement and notwithstanding anything in this Agreement to the contrary, in no event shall Seller be required to drill or complete any ▇▇▇▇▇ prior to Closing. The Buyer shall be permitted to undertake the activities on the Oil and Gas Properties in accordance with and subject to the terms of the Side Letter Agreement.
(e) Without expanding any obligations which Seller may have to Buyer, it is expressly agreed that Seller shall never have any liability to Buyer with respect to its operation of a Property greater than that which it might have as the operator to a non-operator under the applicable operating agreement (or, in the absence of such an agreement, under the AAPL 610 (1989 Revision) form Operating Agreement), IT BEING RECOGNIZED THAT, UNDER SUCH AGREEMENTS AND SUCH FORM, SELLER IS NOT RESPONSIBLE FOR ITS OWN NEGLIGENCE, AND HAS NO RESPONSIBILITY OTHER THAN FOR GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
(f) Promptly following the execution of this Agreement, Buyer shall use its commercially reasonable efforts to secure the fracing and completion services of ▇▇▇▇ Energy Services with respect to the following four uncompleted ▇▇▇▇▇ located in ▇▇▇▇▇▇ County, Texas: Durham ▇▇▇▇▇ Fuente #212HU (API # 389-35440) to be scheduled on or about June 1, 2017; Durham ▇▇▇▇▇ Fuente #214HU (API # 389-35464) to be scheduled on or about June 25, 2017; Durham ▇▇▇▇▇ Fuente #207HL (API # 389-35563) to be scheduled on or about July 10, 2017; and Durham ▇▇▇▇▇ Fuente #209HL (API # 389-35431) to be scheduled on or about August 14, 2017. The scheduled dates set forth above are estimates only and are subject to the availability of ▇▇▇▇ Energy Services. In the event (i) the Closing has not occurred prior to five Business Days before any scheduled service, or (ii) this Agreement is terminated pursuant to Section 8.3, Buyer shall use its commercially reasonable efforts to assign and transfer its rights with respect to such scheduled services to Seller. Further, in the event of such transfer, Buyer agrees to pay to Seller the amount of any costs associated with such scheduled services above Seller’s current negotiated rate with C&J Energy Services, provided that in the event of a transfer pursuant to clause (i) above, no such payment shall be required unless this Agreement is terminated prior to Closing.
Appears in 1 contract
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and until the earlier to occur of the termination of this Agreement pursuant to Article VIII and the Effective Time (unless Parent shall otherwise approve in writing, which approval in the case of clauses (c)(ii), (c)(iv), (c)(vi), (e), (f) and (k) below shall not be unreasonably withheld, delayed or conditioned and except as otherwise permitted or required by this Agreement or described in Section 6.1 of the Company Disclosure Letter):
(a) From the date hereof until business of it and its Subsidiaries shall be conducted in the earlier ordinary course and consistent with past practice;
(b) it shall not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend or propose to amend the Closing Company Charter or termination the Company Bylaws; (iii) split, combine or reclassify its outstanding shares of this Agreementcapital stock or any class thereof; (iv) declare, Seller set aside or pay any dividend payable in cash, stock or property in respect of any capital stock other than (A) dividends from its direct or indirect wholly-owned Subsidiaries to the Company, or (B) dividends payable on the Series C Preferred Shares pursuant to and in accordance with the existing terms thereof; or (v) repurchase, redeem or otherwise acquire, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(c) neither it nor any of its Subsidiaries shall (i) operate the Business only in the Ordinary Course issue, sell, pledge, dispose of Business, including maintaining appropriate service levels, and in compliance with applicable Law including or encumber any COVID-19 Measures; and (ii) use commercially reasonable efforts to (A) maintain and preserve intact the business organization and goodwill of the Business, the Assets and the Assumed Liabilities, (B) maintain satisfactory relationships with Seller’s clients, operators, distributors, customers, insurance underwriters and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, its capital stock of any class (other than Common Shares issuable pursuant to Company Options outstanding on the Business Employees.
(b) Without limiting date hereof under the generality of the foregoing, except Stock Plans as set forth in Section 5.1(b) of the Company Disclosure Schedule, as expressly permitted by this Agreement or as approved in writing by ▇▇▇▇▇, from the date hereof until the earlier of the Closing or the termination of this Agreement, Seller shall not take any action which would require disclosure on Section 2.8 of the Disclosure Schedule or:
(i) take or omit to take any action that results or may reasonably be expected to result in any of the representations and warranties of Seller or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfied;
Letter); (ii) amend or otherwise change the organizational documents of Seller;
(iii) (A) authorize, issue, sell or transfer any membership interests or other securities of Seller, (B) adjust, split, combine or reclassify or otherwise amend the terms of any membership interest or other security of Seller, (C) declare, authorize, set aside make or pay any dividend or other distribution (whether in cash, stock or other property) or (D) enter into any agreement with respect to the voting of any equity of Seller;
(iv) (A) merge or consolidate with any other Person, acquire any business or assets of any other Person (whether by merger, stock purchase, asset purchase or other business combination), other than the purchase of supplies in the Ordinary Course of Business or (B) form any new Subsidiary;
(v) (A) materially change the operation of the Business, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of business;
(vi) make any loans, advances or capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of Business);
(vii) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, or encumber or suffer to exist any Encumbrance (except for Permitted Encumbrances) in respect of, any assets in excess of $250,000 in the aggregate other than (A) sales of inventories (and/or licenses in connection therewith) in the ordinary course of business consistent with past practice and (B) dispositions of obsolete or worthless assets; (iii) incur any Lien on indebtedness for borrowed money other than borrowings (including issuance of letters of credit) and reborrowings under its or any of its Subsidiaries’ credit facilities, as such credit facilities are in existence as of the date hereof without regard to any subsequent amendment or modification, that would at any given time cause the net funded amount of indebtedness outstanding under such credit facilities to be in excess of $4,000,000 in the aggregate (the “Maximum Amount”); provided, however, that the Company may incur indebtedness under such credit facilities in excess of the Maximum Amount to the extent that the senior management of the Company reasonably determines that it is in the best interests of the Company to borrow such additional amounts in order to fund operations of the business of the Company and its Subsidiaries in the ordinary course; and provided, further that prior to taking any actions permitted by the foregoing proviso the Company shall give Parent three Business Days’ prior written notice that it intends to take such actions; (iv) make or commit for any capital expenditures in the aggregate in excess of the Company’s budget for capital expenditures, in each case, for the applicable fiscal year; (v) loan, advance funds or make any investment in or capital contribution to any other Person other than to any Subsidiary; or (vi) acquire (by merger, consolidation, or acquisition of stock or assets) any Person;
(d) except as required by Law, neither it nor any of its Subsidiaries shall terminate, establish, adopt, enter into, amend or otherwise encumber modify any AssetsCompany Compensation and Benefit Plans in a manner that would materially increase benefits thereunder or increase the salary, wage, bonus or other compensation of any employees except salary increases as a result of employee promotions occurring in the ordinary course of business consistent with past practices;
(e) neither it nor any of its Subsidiaries shall (i) settle or compromise any material claims or litigation in excess of $250,000 in the aggregate other than (A) settlements and compromises in the ordinary course of business and (B) settlements and compromises of liabilities not in excess of $500,000 reflected or reserved against on the financial statements included in the Company Reports; or (ii) waive, release or assign any material rights or claims in excess of $250,000 in the aggregate other than in the Ordinary Course ordinary course of Businessbusiness; provided, however, that the Company shall not settle any Governmental claims or proceedings if such settlement would result in suspension, debarment or injunctive relief that is material to the businesses of the Company and its Subsidiaries taken as a whole or that would otherwise materially affect Parent and its Affiliates;
(ixf) acquire neither it nor any real property of its Subsidiaries shall make any material Tax election, change any annual Tax accounting period, adopt or undertake change any material method of Tax accounting, extend or commit waive any applicable statute of limitations with respect to undertake capital expenditures for the purchase Taxes, enter into any closing agreement in respect of equipment any material Tax claim, audit or tangible assets exceeding $35,000 assessment, surrender any right to claim a material Tax refund, offset or other reduction in the aggregatea material Tax liability or settle or compromise any material Tax liability;
(xg) agree to, request or adopt use commercially reasonable efforts to (Ai) any moratorium or suspension of payment of any Indebtednesspreserve intact its business organization and goodwill, (Bii) keep available the appointment services of a receiverits present officers and key employees and (iii) preserve the goodwill and business relationships with customers, administratorsuppliers and others having business relationships with Company;
(h) use commercially reasonable efforts to maintain with financially responsible insurance companies insurance on its tangible assets and its business in such amounts and against such risks and losses as are consistent with past practice;
(i) not enter into any plan of complete or partial liquidation, liquidatordissolution, assigneemerger, trustee consolidation, restructuring, recapitalization or other similar official with respect to Seller, (C) an assignment for the benefit reorganization of creditors Company or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of its Subsidiaries (other than the foregoing (A) through (Ctransactions contemplated by this Agreement);
(xij) incur not alter, through merger, liquidation, reorganization, restructuring or any Indebtedness or issue any debt securities or warrants or other rights to acquire debt securities of Seller or assume, guarantee or endorse, as an accommodation or otherwisefashion, the obligations of any Person for Indebtedness corporate structure or capital obligations, in the case ownership of any of the foregoingCompany’s Subsidiaries;
(xiik) cancel any debts owed to or claims held by Seller in excess of $35,000;
(xiii) abandon, disclaim, dedicate to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreement;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;
(xv) revalue any of the assets of the Seller, except as required by GAAPGAAP or as recommended in writing by the Company’s independent auditors, (i) not revalue in any material respect any of its assets, including writing down the value of inventory or writing-off notes or accounts receivables other than in the ordinary course of business consistent with past practice, or enter into, or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contract;
(xvi) (Aii) change any method of accounting or accounting principles or practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Business;
(xviil) makenot (i) grant any material severance, revoke retention or change termination pay to, or amend in any Tax election by Seller that could adversely impact the amount material respect any existing severance, retention or termination arrangement with, any current or former director, officer or employee of Taxes due Company or payable any of its Subsidiaries, (and/or any direct or indirect owner of equity interests in Buyerii) after the Closing Date;
(xviii) modify, amend or terminate (other than pursuant except to the expiration extent required under Contracts existing as of its term other than as a result of any action taken by Sellerthe date hereof, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunder;
(xix) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property;
(xx) commence, settle or compromise any Proceeding;
(xxi) cancel, materially reduce or fail to maintain any insurance policy;
(xxii) change or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) increase in any material respect or fail to pay or delay payment of payables or other Liabilities accelerate in any material respect;
respect the payment or vesting of, any benefits payable under any existing severance, retention or termination pay policies or employment agreements, (xxiiiiii) engage enter into or amend in any transaction material respect any employment, consulting, deferred compensation or other similar agreement with any Related Partiesdirector, officer, consultant or employee of Company or any of its Subsidiaries or (iv) establish, adopt or amend (except as required by applicable law) any collective bargaining agreement, bonus, profit-sharing, thrift, pension, retirement, post-retirement medical or life insurance, retention, deferred compensation, compensation, stock option, restricted stock or other benefit plan or arrangement covering any present or former director, officer or employee, or any beneficiaries thereof, of Company or any of its Subsidiaries; or
(xxivm) neither it nor any of its Subsidiaries will authorize or enter into an agreement to do any agreement, commitment or understanding (whether written or oral) with respect to of the foregoing, or commit to any of the foregoing actions.
Appears in 1 contract
Interim Operations. (a) From the date hereof until the earlier of the Closing or termination of this Agreement, Seller shall (i) operate the Business only in the Ordinary Course of Business, including maintaining appropriate service levels, and in compliance with applicable Law including any COVID-19 Measures; and (ii) use commercially reasonable efforts to Except (A) maintain and preserve intact the business organization and goodwill of the Business, the Assets and the Assumed Liabilitiesas Parent shall otherwise permit (which permission shall not be unreasonably withheld or delayed), (B) maintain satisfactory relationships with Seller’s clients, operators, distributors, customers, insurance underwriters and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes as required in order for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services of, the Business Employees.
(b) Without limiting the generality of the foregoing, except as set forth in Section 5.1(b) of the Disclosure Schedule, as expressly permitted by this Agreement or as approved in writing by ▇▇▇▇▇, from the date hereof until the earlier of the Closing or the termination of this Agreement, Seller shall not take any action which would require disclosure on Section 2.8 of the Disclosure Schedule or:
(i) take or omit to take any action that results or may reasonably be expected to result in any of the representations and warranties of Seller or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfied;
(ii) amend or otherwise change the organizational documents of Seller;
(iii) (A) authorize, issue, sell or transfer any membership interests or other securities of Seller, (B) adjust, split, combine or reclassify or otherwise amend the terms of any membership interest or other security of Seller, (C) declare, authorize, set aside make or pay any dividend or other distribution (whether in cash, stock or other property) or (D) enter into any agreement with respect to the voting of any equity of Seller;
(iv) (A) merge or consolidate with any other Person, acquire any business or assets of any other Person (whether by merger, stock purchase, asset purchase or other business combination), other than the purchase of supplies in the Ordinary Course of Business or (B) form any new Subsidiary;
(v) (A) materially change the operation of the Business, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required it to comply with any Law or any contract existing on the terms date hereof to which the Company or any of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of business;
(vi) make any loans, advances or capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of Business);
(vii) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employeeits Subsidiaries is bound, (C) grant any severance as set forth in Section 3.1 of the Company Disclosure Letter, or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter intoas otherwise contemplated by this Agreement (including the Recapitalization), adoptthe Company covenants and agrees as to itself and its Subsidiaries that, amend or terminate any Employee Benefit Plan or after the date hereof and prior to the Merger Closing:
(Ea) hire any Business Employee or terminate or transfer any Business Employee (other than for cause)the business of the Company and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, the Company shall and shall cause its Subsidiaries to use all reasonable commercial efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, officers and employees;
(viiib) it shall not (i) issue, sell, pledge, dispose of or encumber any share capital owned by it in any of its Subsidiaries; (ii) adopt any change to the Company’s and its Subsidiaries’ articles of incorporation or bylaws; (iii) amend the Shareholders Agreement, (iv) split, consolidate, combine or reclassify its issued and outstanding share capital; (v) declare, set aside or pay any dividend payable in cash, shares or property in respect of any share capital other than dividends from its direct or indirect wholly owned Subsidiaries and other than regular quarterly cash dividends; or (vi) repurchase, redeem or otherwise acquire, or permit any of its Subsidiaries to purchase or otherwise acquire, any share capital or any securities convertible into or exchangeable or exercisable for any share capital;
(c) other than in connection with (i) exercises of Company Warrants or (ii) issuances of shares of Company Common Stock pursuant to options and other share-based awards outstanding on the date hereof under the Company Stock Option Plans or any other Company Benefit Plan, neither it nor any of its Subsidiaries shall (A) issue, sell, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any share capital of any class or any other property or assets; (B) other than (i) in the ordinary and usual course of business, (ii) dispositions of obsolete assets that are not material to either of the Company’s lines of business, and (iii) Permitted Asset Sales made pursuant to agreements entered into prior to the date hereof, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on or otherwise encumber any Assets, other property or assets (including share capital of any of its Subsidiaries) or incur or modify any material indebtedness or other liability; or (C) make or authorize or commit for any capital expenditures other than in the Ordinary Course ordinary and usual course of Businessbusiness consistent with the Company’s budgeted capital expenditures as set forth under “Capital Expenditure Budget” in Section 3.1 of the Company Disclosure Letter (it being understood that the timing of budgeted expenditures may be accelerated or decelerated by the Company), and other than capital expenditures in excess of those reflected in such budget to the extent required in order for the R&B Telephone Company and NTELOS Telephone Inc. to continue to meet their public services obligations to provide reasonable service, or, by any means, except to the extent required by existing contractual commitments, make any significant acquisition of, or investment in, assets or shares of or any other interest in, any other Person;
(ixd) acquire neither it shall nor shall it cause its Subsidiaries to merge or consolidate with any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregateother Person;
(xe) agree toneither it shall nor shall it cause its Subsidiaries to terminate, request establish, adopt, enter into, make any new grants or adopt (A) awards under, amend or otherwise modify, any moratorium Company Benefit Plans or suspension of payment increase the salary, wage, bonus or other compensation of any Indebtednessemployees, (B) except amendments required by Law or otherwise necessary to preserve the appointment intended benefits under such Company Benefit Plans and salary increases for employees occurring in the ordinary and usual course of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C)business;
(xif) incur any Indebtedness or issue any debt securities or warrants or other rights neither it shall nor shall it cause its Subsidiaries to acquire debt securities of Seller or assume, guarantee or endorsealter its general practices and policies relating to the payment and collection, as an accommodation or otherwisethe case may be, the obligations of any Person for Indebtedness or capital obligationsaccounts payable and accounts receivable, in the case of each case, in any of the foregoingmaterial respect;
(xiig) cancel neither it shall nor shall it cause its Subsidiaries to settle or compromise any debts owed to material claims or claims held by Seller in excess of $35,000;
(xiii) abandon, disclaim, dedicate to the public, sell, assign litigation or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreement;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;
(xv) revalue any of the assets of the Seller, except as required by GAAP, or enter into, or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contract;
(xvi) (A) change any method of accounting or accounting practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Business;
(xvii) make, revoke or change any Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date;
(xviii) modify, amend or terminate (other than pursuant to the expiration any of its term other than as a result of any action taken by SellerDesignated Contracts or waive, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunderclaims, except for settlements entered into as set forth in Section 3.1 of the Company Disclosure Schedule, provided that any such settlement shall constitute a full and complete release of related liabilities or obligations by the Company or its applicable Subsidiary and shall not in any manner place material restrictions on the operations of the Company or such Subsidiary;
(xixh) fail it shall use its reasonable commercial efforts to pay prevent any required maintenance insurance policy of the Company or its Subsidiaries from being cancelled or terminated prior to the scheduled end of its term;
(i) neither it shall nor shall it cause its Subsidiaries to enter into any lease or amend an existing lease to increase the obligations under such existing lease (whether of real or personal property) providing for annual rentals of (1) $1,000,000 or more in the aggregate per year or (2) $500,000 per year for a period of three or more years, and, in each case, is not terminable by the Company or its Subsidiaries on 90 days’ or less notice without penalty;
(j) neither it shall nor shall it cause its Subsidiaries to enter into any agreement for the purchase of materials, supplies, goods, services, equipment or other assets that requires either (1) annual payments by the Company and the Subsidiaries of $750,000 or more or (2) aggregate future payments by the Company and the Subsidiaries of $5,000,000 or more, and, in each case is not terminable by the Company or its Subsidiaries on 90 days’ or less notice without penalty;
(k) neither it shall nor shall it cause its Subsidiaries to enter into any sales, distribution or other similar fees agreement providing for the sale by the Company or otherwise fail any Subsidiary of materials, supplies, goods, services, equipment or other assets (but not including purchases made under tariff) that requires either (1) annual payments to make required filings the Company and the Subsidiaries of $500,000 or more or (2) aggregate future payments required over the next two years to maintain the Company and further prosecute any applications for registration the Subsidiaries of Owned Intellectual Property $2,500,000 or otherwise abandonmore, let lapse and, in each case is not terminable by the Company or fail to protect any Owned Intellectual Propertyits Subsidiaries on 90 days’ or less notice without penalty;
(xxl) commenceneither it shall nor shall it cause its Subsidiaries to enter into any partnership, settle joint venture or compromise other similar agreement or arrangement, except for any ProceedingIRUs, co-location agreement or other ordinary course commercial business relationships in the ordinary course of business consistent with past practice;
(xxim) cancelneither it shall nor shall it cause its Subsidiaries to incur, materially reduce assume or fail to maintain guarantee any insurance policyindebtedness for borrowed money (other than capital leases or in connection with the Debt Financing) other than in the ordinary course of business and in amounts and on terms consistent with past practices, but in any event not exceeding a net total of $2,000,000;
(xxiin) change neither it shall nor shall it cause its Subsidiaries to create or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in otherwise incur any material respect or fail to pay or delay payment of payables or Lien (other Liabilities in than Permitted Liens) on any material respectasset other than in the ordinary course of business consistent with past practices or as otherwise permitted by the Debt Financing;
(xxiiio) engage in neither it shall nor shall it cause its Subsidiaries to (1) enter into any transaction employment, deferred compensation, severance, retirement or other similar agreement entered into with any Related Partiesdirector or officer of the Company (or any amendment to any such existing agreement), (2) offer of any new severance or termination protection to any director or officer of the Company, or (3) make or authorize a change in compensation or other benefits payable to any director or officer of the Company pursuant to any severance or retirement plans or policies thereof; orprovided, however, that the Company and its Subsidiaries shall be permitted to enter into such arrangements with any new non-executive officer or any non-executive officer that has been promoted or had a change in role or responsibilities;
(xxivp) neither it shall nor shall it cause its Subsidiaries to materially change their accounting principles, practices or methods, except as required by GAAP or Law;
(q) neither it shall nor shall it cause its Subsidiaries to authorize or enter into an agreement to do any agreement, commitment or understanding (whether written or oral) with respect to of the foregoing; and
(r) the Company shall use its reasonable best efforts to consummate the Permitted Asset Sales pursuant to their terms.
Appears in 1 contract
Interim Operations. (a) From the date hereof until the earlier of the Closing or termination of this Agreement, Seller shall (i) operate the Business only in the Ordinary Course of Business, including maintaining appropriate service levels, and in compliance with applicable Law including any COVID-19 Measures; and (ii) use commercially reasonable efforts to (A) maintain and preserve intact the business organization and goodwill of the Business, the Assets and the Assumed Liabilities, (B) maintain satisfactory relationships with Seller’s clients, operators, distributors, customers, insurance underwriters and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services of, the Business Employees.
(b) Without limiting the generality of the foregoing, except Except as set forth in Section 5.1(b) 3.1 of the Western Disclosure ScheduleLetter, Western covenants and agrees as expressly permitted by this Agreement or as approved in writing by ▇▇▇▇▇to itself and the Transferred Subsidiaries that, from after the date hereof until the earlier of and prior to the Closing or the termination of (unless Protection One shall otherwise approve in writing, and except as otherwise expressly contemplated by this Agreement, Seller shall not take any action which would require disclosure on Section 2.8 the Stock Option Agreement and the Option and Voting Agreement):
(a) the businesses of the Disclosure Schedule or:Transferred Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, Western shall cause the Transferred Subsidiaries to use all reasonable efforts to preserve their respective business organizations intact and maintain their respective existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, employees and business associates;
(b) neither Western nor any of its Subsidiaries shall (i) take issue, sell, pledge, dispose of, encumber or omit accelerate, modify, or amend the terms of any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to take acquire, any action that results or may reasonably be expected to result shares of any capital stock in any of the representations and warranties of Seller or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfied;
Transferred Subsidiary; (ii) amend the certificate of incorporation or otherwise change the organizational documents by-laws of Seller;
any Transferred Subsidiary; (iii) (A) authorize, issue, sell or transfer any membership interests or other securities of Seller, (B) adjust, split, combine or reclassify or otherwise amend the terms outstanding shares of capital stock of any membership interest or other security of Seller, Transferred Subsidiary; (Civ) declare, authorize, set aside make or pay any dividend or other distribution (whether payable in cash, stock or other property) or (D) enter into any agreement with property in respect to the voting of any equity capital stock of Seller;
(iv) (A) merge WestSec or consolidate with any other Person, acquire any business or assets of any other Person (whether by merger, stock purchase, asset purchase or other business combination), other than the purchase of supplies in the Ordinary Course of Business or (B) form any new Subsidiary;
Westar Security; (v) (A) materially change the operation repurchase, redeem or otherwise acquire, or permit any of the Businessits Subsidiaries to purchase or otherwise acquire, Assets or the Assumed Liabilities any shares of capital stock of any Transferred Subsidiary or any method securities convertible into or exchangeable or exercisable for any shares of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with capital stock of any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of business;
Transferred Subsidiary; (vi) make any loans, advances or capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course ordinary and usual course of Business);
(vii) (A) institute or announce any increase in the compensationbusiness, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on or otherwise encumber any Assetsother property or assets, real, personal or mixed (including, without limitation, leasehold interests and intangible assets and capital stock of any Transferred Subsidiary) of any Transferred Subsidiary or permit any Transferred Subsidiary to incur or modify any material indebtedness or other than liability; or (vii) permit any Transferred Subsidiary to make or authorize or commit for any capital expenditures or, by any means, permit any Transferred Subsidiary to make any acquisition of, or investment in, assets or stock of any other Person or entity, except for (A) acquisitions of security monitoring accounts in the Ordinary Course ordinary course of Business;
business consistent with past practice, (ixB) acquire any real property or undertake or commit other acquisitions of security monitoring accounts not to undertake exceed $5,000,000 in the aggregate and (C) other capital expenditures for the purchase of equipment or tangible assets exceeding not to exceed $35,000 500,000 in the aggregate;
(xc) agree toneither Western nor any of its Subsidiaries shall terminate, request establish, adopt, enter into, make any new grants or adopt (A) awards under, amend or otherwise modify, any moratorium Compensation and Benefit Plans or suspension of payment increase the salary, wage, bonus or other compensation of any Indebtednessemployees of any Transferred Subsidiary except grants, awards or increases occurring in the ordinary and usual course of business (B) the appointment of a receiverwhich shall include normal periodic performance reviews and related compensation and benefit grants, administrator, liquidator, assignee, trustee awards or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (Cincreases);
(xid) incur neither Western nor any Indebtedness of its Subsidiaries shall settle or issue compromise any debt securities material claims or warrants or other rights to acquire debt securities of Seller or assumelitigation involving any Transferred Subsidiary or, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person for Indebtedness or capital obligations, except in the case ordinary and usual course of any of the foregoing;
(xii) cancel any debts owed to or claims held by Seller in excess of $35,000;
(xiii) abandon, disclaim, dedicate to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreement;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;
(xv) revalue any of the assets of the Seller, except as required by GAAP, or enter into, or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contract;
(xvi) (A) change any method of accounting or accounting practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Business;
(xvii) make, revoke or change any Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date;
(xviii) business modify, amend or terminate (other than pursuant any material Contracts to the expiration of its term other than as which a result of any action taken by SellerTransferred Subsidiary is party or waive, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunderof any Transferred Subsidiary;
(xixe) fail neither Western nor any of its Subsidiaries shall make any Tax election with respect to pay Taxes payable by any required maintenance Transferred Subsidiary or other similar fees permit any insurance policy naming any Transferred Subsidiary as a beneficiary or otherwise fail loss-payable payee to make required filings be cancelled or payments required to maintain terminated except in the ordinary and further prosecute any applications for registration usual course of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Propertybusiness;
(xxf) commenceneither Western nor any of its Subsidiaries shall take any action or omit to take any action that would cause any of its representations and warranties herein to become untrue in any material respect; and
(g) neither it nor any of its Subsidiaries will authorize or enter into an agreement to do any of the foregoing. Except as set forth in Section 3.1 of the Protection One Disclosure Letter, Protection One covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Closing (unless Western shall otherwise approve in writing, and except as otherwise expressly contemplated by this Agreement, the Stock Option Agreement and the Option and Voting Agreement):
(h) the business of Protection One and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, Protection One and its Subsidiaries shall use all reasonable efforts to preserve their respective business organizations intact and maintain their respective existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, employees and business associates;
(i) neither Protection One nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose of, encumber or accelerate, modify, or amend the terms of any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of any capital stock of Protection One or any of its Subsidiaries; (ii) amend the certificate of incorporation or by-laws of Protection One or any of its Subsidiaries; (iii) split, combine or reclassify the outstanding shares of capital stock of Protection One or any of its Subsidiaries; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock other than dividends from Protection One's direct or indirect wholly-owned Subsidiaries and the dividend and other distributions referred to in the recitals to this Agreement; or (v) repurchase, redeem or otherwise acquire any shares of capital stock or any securities convertible into or exchangeable or exercisable for any shares of capital stock of Protection One or any of its Subsidiaries; (vi) other than in the ordinary and usual course of business, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any other property or assets, real, personal or mixed (including, without limitation, leasehold interests and intangible assets and (including capital stock of any of Protection One's Subsidiaries) or incur or modify any material indebtedness or other liability; or (vii) make or authorize or commit for any capital expenditures or, by any means, make any acquisition of, or investment in, assets or stock of any other Person or entity, except for (A) acquisitions of security monitoring accounts in the ordinary course of business consistent with past practice, (B) other acquisitions of security monitoring accounts not to exceed $5,000,000 in the aggregate and (C) other capital expenditures not to exceed $500,000 in the aggregate;
(j) neither Protection One nor any of its Subsidiaries shall terminate, establish, adopt, enter into, make any new grants or awards under, amend or otherwise modify, any Protection One Compensation and Benefit Plans or increase the salary, wage, bonus or other compensation of any employees except grants, awards or increases occurring in the ordinary and usual course of business (which shall include normal periodic performance reviews and related compensation and benefit grants, awards or increases) except for the bonuses referred to in the recitals to this Agreement;
(k) neither Protection One nor any of its Subsidiaries shall settle or compromise any Proceedingmaterial claims or litigation or, except in the ordinary and usual course of business modify, amend or terminate any of its material Contracts or waive, release or assign any material rights or claims;
(xxil) cancel, materially reduce neither Protection One nor any of its Subsidiaries shall make any Tax election or fail to maintain permit any insurance policypolicy naming it as a beneficiary or loss-payable payee to be cancelled or terminated except in the ordinary and usual course of business;
(xxiim) change neither Protection One nor any of its Subsidiaries shall take any action or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration omit to take any action that would cause any of collections or receivables (whether or not past due) in any material respect or fail its representations and warranties herein to pay or delay payment of payables or other Liabilities become untrue in any material respect;; and
(xxiiin) engage in neither Protection One nor any transaction with any Related Parties; or
(xxiv) of its Subsidiaries will authorize or enter into an agreement to do any agreement, commitment or understanding (whether written or oral) with respect to of the foregoing.
Appears in 1 contract
Interim Operations. (a) From The Company covenants and agrees as to itself and its Subsidiaries that, from the date hereof of this Agreement until the earlier of the Closing or Effective Time and the termination of this Agreement, Seller shall Agreement in accordance with Article VI (except: (i) operate the Business only if Parent shall otherwise approve in the Ordinary Course of Businesswriting, including maintaining appropriate service levelssuch approval not to be unreasonably withheld, and in compliance with applicable Law including any COVID-19 Measures; and conditioned or delayed, (ii) use commercially reasonable efforts as otherwise expressly required by this Agreement, (iii) as expressly set forth in Section 4.1(a) of the Company Disclosure Letter, (iv) as required by applicable Laws or any Governmental Entity or (v) with respect to (A) maintain and preserve intact any COVID-19 Measures to the extent reasonably necessary for the operation of the Company), the business organization and goodwill of the Business, the Assets Company and the Assumed Liabilities, (B) maintain satisfactory relationships with Seller’s clients, operators, distributors, customers, insurance underwriters and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or performSubsidiaries shall be conducted, in all material respects, other obligations when duein the ordinary course of business (including, (Dfor the avoidance of doubt, consistent with recent past practice in light of COVID-19) maintain in effect all Permits and (E) maintain good relations with, and keep available the services of, the Business Employees.
(b) applicable Law. Without limiting the generality of the foregoingforegoing and in furtherance thereof, from the date of this Agreement until the earlier of the Effective Time and the termination of this Agreement in accordance with Article VI, except (A) as otherwise contemplated or required by this Agreement, (B) as Parent may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned), (C) as required by applicable Laws or any Governmental Entity or (D) as set forth in Section 5.1(b4.1(a) of the Company Disclosure ScheduleLetter, as expressly permitted by this Agreement or as approved in writing by ▇▇▇▇▇the Company will not, from the date hereof until the earlier of the Closing or the termination of this Agreementand will not permit its Subsidiaries, Seller shall not take any action which would require disclosure on Section 2.8 of the Disclosure Schedule orto:
(i) take adopt any amendments to its charter or omit to take any action that results by-laws or may reasonably be expected to result in any of the representations and warranties of Seller or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfiedother applicable governing instruments;
(ii) amend merge or otherwise change consolidate the organizational documents Company or any of Sellerits Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiaries, except for any such transactions solely among Subsidiaries of the Company;
(iii) (A) authorize, issue, sell acquire assets or transfer capital stock outside of the ordinary course of business from any membership interests other Person with a value or other securities purchase price in the aggregate in excess of Seller, (B) adjust, split, combine $5,000,000 in any transaction or reclassify or otherwise amend the terms series of any membership interest or other security of Seller, (C) declare, authorize, set aside make or pay any dividend or other distribution (whether in cash, stock or other property) or (D) enter into any agreement with respect to the voting of any equity of Sellerrelated transactions;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer or encumbrance of, any shares of capital stock of the Company or any its Subsidiaries (other than (A) merge or consolidate with any other Personto the extent permitted under Section 4.1(xiv) below, acquire any business or assets of any other Person (whether by merger, stock purchase, asset purchase or other business combination), other than the purchase of supplies in the Ordinary Course of Business or (B) form the issuance of Shares upon the settlement of Restricted Shares and Performance Shares outstanding on the date of this Agreement in accordance with their terms on the date of this Agreement, or (C) the issuance of shares of capital stock by a Subsidiary of the Company to the Company or another Subsidiary of the Company), or securities convertible or exchangeable into or exercisable for any new Subsidiaryshares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible, exchangeable or exercisable securities;
(v) (A) materially change the operation of the Business, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of business;
(vi) make any loans, advances or capital contributions to, to or investments in, in any Person (other than advances the Company or any direct or indirect Subsidiary of expenses to Business Employees the Company) in excess of $2,000,000 in the Ordinary Course aggregate;
(vi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of Businessits capital stock (except for dividends paid by any direct or indirect Subsidiary of the Company to the Company or to any other direct or indirect Subsidiary of the Company);
(vii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock (A) institute or announce any increase in other than, to the compensation, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit extent required by the Stock Plan or (E) hire any Business Employee award outstanding on the date hereof, the acquisition of any Shares tendered by current or terminate former employees or transfer any Business Employee (other than for causedirectors in order to pay Taxes in connection with the settlement of Restricted Shares or Performance Shares);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on indebtedness for borrowed money or otherwise encumber any Assets, guarantee such indebtedness of another Person (other than in the Ordinary Course of Business;
(ix) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing Subsidiary of the inability of Seller to pay its debts as they become dueCompany), or (D) any other thing under any applicable Law relating to bankruptcy issue or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur any Indebtedness or issue sell any debt securities or warrants or other rights to acquire any debt securities security of Seller the Company or assumeany of its Subsidiaries, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person except for Indebtedness or capital obligations, indebtedness for borrowed money incurred in the case ordinary and usual course of business pursuant to the Existing Credit Facility and that can be repaid without penalty on or prior to the Closing Date or issuances of letters of credit under the Company’s revolving credit facility;
(ix) make or authorize any capital expenditure in excess of $2,500,000 in the aggregate, other than expenditures relating to internally developed software in the ordinary course of business;
(x) make any material changes with respect to accounting policies or procedures, except as required by changes in GAAP or a Governmental Entity;
(xi) settle any Actions before a Governmental Entity for an amount payable by the Company or any of its Subsidiaries in excess of $2,500,000 or for any commitment, obligation or liability of the foregoingCompany in excess of such amount;
(xii) cancel make, change or revoke any debts owed to material Tax election, change any Tax accounting period, adopt or claims held by Seller change any material Tax accounting method, amend any material Tax Return, enter into any closing agreement in excess respect of $35,000Taxes, settle or compromise any material liability or claim for Taxes, or surrender any material claim for a refund of Taxes;
(xiii) abandonexcept for transactions among the Company and its Subsidiaries or among the Company’s Subsidiaries, disclaim, dedicate to the publictransfer, sell, assign lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or grant allow to lapse or expire or otherwise dispose of any security interest inassets or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, in each case which are material to or under any Business Intellectual Property or Business IP the Company and its Subsidiaries taken as a whole, other than equipment, inventory, supplies and other assets in the ordinary course of business and other than pursuant to Contracts in effect prior to the date of this Agreement;
(xiv) disclose except as required pursuant to the terms of any confidential existing Benefit Plan or proprietary information Contract in effect prior to the date of this Agreement and made available to Parent, or confidential Business Intellectual Property as otherwise required by applicable Laws, (A) grant or provide any severance or termination payments or benefits to any Persondirector, officer or other employee of the Company or any of its Subsidiaries, except in the ordinary course of business or consistent with past practice or pursuant to existing Contracts, (B) increase or decrease the compensation or make any new equity awards to any director, officer or other employee of the Company or any of its Subsidiaries, except in the ordinary course of business or consistent with past practice, or (C) establish, adopt, enter into, terminate or materially amend or modify any Benefit Plan (or any arrangement that would be a Benefit Plan if in effect on the date hereof), other than employees of Seller changes that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement made in connection with the Seller;annual renewal of group welfare benefit contracts in the ordinary course of business or consistent with past practice that do not materially increase the costs to the Company or any of its Subsidiaries of any such Benefit Plan; or
(xv) revalue any of the assets of the Seller(i) negotiate, except as required by GAAPmodify, extend, or enter intointo any Labor Agreement or (ii) recognize or certify any labor union, labor organization, works council, employee representative or group of employees as the bargaining representative for any employees of the Company or its Subsidiaries;
(xvi) implement or announce any employee layoffs, plant closings, reductions in force, furloughs, temporary layoffs, salary or wage reductions, work schedule changes or other actions that would be reasonably likely to implicate the WARN Act;
(xvii) hire, engage, terminate (without cause), furlough, or permit temporarily layoff any employee or independent contractor with annual base compensation in excess of $250,000;
(xviii) waive or release any noncompetition, nonsolicitation, nondisclosure, noninterference, nondisparagement, or other restrictive covenant obligation of any current or former employee or independent contractor;
(xix) enter into or adopt any “poison pill” or similar stockholder rights plan, in each case, applicable to the assets Merger and the other transactions contemplated by this Agreement;
(xx) amend or modify in any material respect, waive any material rights under, terminate (other than in the ordinary course of business or any termination in the Seller to become bound by any accordance with the terms of an existing Material Contract that is occurs automatically), release, settle or compromise any material claim, liability or obligation under any Material Contract or enter into (other than in the ordinary course of business) any contract which if entered into prior to the date of this Agreement would constitute have been a Material Contract;
(xvi) (A) change any method of accounting or accounting practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Business;
(xvii) make, revoke or change any Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date;
(xviii) modify, amend or terminate (other than pursuant to the expiration of its term other than as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunder;
(xix) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property;
(xx) commence, settle or compromise any Proceeding;
(xxi) cancel, materially reduce or fail to maintain enter into any insurance policynew line of business outside the existing business of the Company and its Subsidiaries as of the date of this Agreement;
(xxii) change or modify the Seller’s creditabandon, collectionsell, assign, license, permit to lapse, or payment policies, procedures or practices, including acceleration otherwise dispose of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment Company Intellectual Property, other than non-exclusive licenses granted in the ordinary course of payables or other Liabilities in any material respect;business; or
(xxiii) engage in any transaction with any Related Parties; or
(xxiv) agree, authorize or enter into commit to do any agreement, commitment or understanding (whether written or oral) with respect to of the foregoing.
Appears in 1 contract
Interim Operations. Except with Purchaser’s prior written consent (a) From the date hereof until the earlier of the Closing not to be unreasonably withheld, conditioned or termination of this Agreementdelayed), Seller shall cause each of the Company and its Subsidiaries (i) operate the Business only to conduct its business in the Ordinary Course of Businessordinary course and, including maintaining appropriate service levelsto the extent consistent therewith, and in compliance with applicable Law including any COVID-19 Measures; and (ii) use its commercially reasonable efforts to (A) maintain and preserve intact the its business organization and goodwill of the Business, the Assets and the Assumed Liabilitiesorganizations intact, (B) maintain satisfactory relationships existing relations and goodwill with Seller’s clientsGovernmental Entities, operatorscustomers, suppliers, distributors, customerscreditors, insurance underwriters lessors, employees and other third parties having business dealings with Sellerassociates, and (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services of, the Business Employees.
of its present employees and agents; and (bii) Without limiting the generality of the foregoing, except not to (other than as set forth in Section 5.1(b) the corresponding section of the Seller Disclosure Schedule, as expressly permitted by this Agreement or as approved in writing by ▇▇▇▇▇, from the date hereof until the earlier of the Closing or the termination of this Agreement, Seller shall not take any action which would require disclosure on Section 2.8 of the Disclosure Schedule or:Letter):
(ia) take or omit to take any action that results or may reasonably be expected to result in any of the representations and warranties of Seller or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfiedamend its Organizational Documents;
(ii) amend or otherwise change the organizational documents of Seller;
(iii) (A) authorize, issue, sell or transfer any membership interests or other securities of Seller, (B) adjust, split, combine or reclassify or otherwise amend the terms of any membership interest or other security of Seller, (C) declare, authorize, set aside make or pay any dividend or other distribution (whether in cash, stock or other property) or (D) enter into any agreement with respect to the voting of any equity of Seller;
(iv) (Ab) merge or consolidate with any other Person, ;
(c) acquire any assets outside of the ordinary course of business or assets of consistent with past practice from any other Person (whether by merger, stock purchase, asset with a value or purchase or other business combination), other than the purchase of supplies price in the Ordinary Course aggregate in excess of Business $50,000,000.00 or (B) form that would have any new Subsidiarypossibility of preventing or delaying the Closing beyond the Termination Date;
(vd) (A) materially change issue, sell, pledge, dispose of, grant, transfer, Encumber, or authorize the operation of the Business, Assets or the Assumed Liabilities or any method of purchaseissuance, sale, leasepledge, managementdisposition, marketinggrant, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of business;
(vi) make any loans, advances or capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of Business);
(vii) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guaranteeguarantee or other Encumbrance of, sell, mortgage, pledge, dispose any Equity Interests of the Company or incur any Lien on or otherwise encumber any Assets, of its Subsidiaries (other than in the Ordinary Course issuance of Business;
Equity Interests (ixi) acquire any real property by a wholly-owned Subsidiary of the Company to the Company or undertake another wholly-owned Subsidiary or commit to undertake capital expenditures for (ii) by the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect Company to Seller), (C) an assignment for the benefit of creditors securities convertible or an admission in writing of the inability of Seller to pay its debts as they become dueexchangeable into, or (D) exercisable for, any other thing under Equity Interests or any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur any Indebtedness or issue any debt securities or options, warrants or other rights of any kind to acquire debt securities of Seller any such Equity Interests or assume, guarantee such convertible or endorse, as an accommodation or otherwise, the obligations of any Person for Indebtedness or capital obligations, in the case of any of the foregoingexchangeable securities;
(xiie) cancel create or incur any debts owed Encumbrance (other than a Permitted Encumbrance) on the assets of the Company or any of its Subsidiaries that, individually or in the aggregate, is material to the Company or claims held by Seller in excess any of $35,000its Subsidiaries;
(xiiif) abandonmake any loans, disclaimadvances, dedicate to the public, sell, assign guarantees or grant any security interest in, capital contributions to or under any Business Intellectual Property or Business IP Agreement;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to investments in any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;
(xv) revalue any of the assets of the Seller, except as required by GAAP, or enter into, or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contract;
(xvi) (A) change any method of accounting or accounting practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Business;
(xvii) make, revoke or change any Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date;
(xviii) modify, amend or terminate (other than pursuant to the expiration of its term other than as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunder;
(xix) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property;
(xx) commence, settle or compromise any Proceeding;
(xxi) cancel, materially reduce or fail to maintain any insurance policy;
(xxii) change or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;
(xxiii) engage in any transaction with any Related Parties; or
(xxiv) authorize or enter into any agreement, commitment or understanding (whether written or oral) with respect to the foregoing.than
Appears in 1 contract
Sources: Stock Purchase Agreement
Interim Operations. (a) From Except as otherwise expressly permitted by this Agreement, Holdco agrees, that, after the date hereof until and prior to the earlier Closing (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, conditioned or delayed) and except as required by applicable Laws, Holdco shall cause each of the Closing or termination of this Agreement, Seller shall (i) operate businesses utilizing the Business only Brand Assets to be operated in the Ordinary Course of Business, including maintaining appropriate service levels, and in compliance with applicable Law including any COVID-19 Measures; and (ii) use commercially reasonable efforts to (A) maintain and preserve intact the business organization and goodwill of the Business, the Assets and the Assumed Liabilities, (B) maintain satisfactory relationships with Seller’s clients, operators, distributors, customers, insurance underwriters and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services of, the Business Employees.
(b) Course. Without limiting the generality of of, and in furtherance of, the foregoing, except as set forth in Section 5.1(b) of the Disclosure Schedule, as expressly permitted by this Agreement or as approved in writing by ▇▇▇▇▇, from the date hereof until the earlier Closing, except as otherwise contemplated by this Agreement or as Buyer may approve in writing (such approval not to be unreasonably withheld, conditioned or delayed), none of the Closing or Company nor (to the termination of this Agreementextent related to any business utilizing the Brand Assets) any Brand Companies shall, Seller and Holdco and its Affiliates shall cause the Company and (to the extent related to any business utilizing the Brand Assets) each such Brand Company not take to, do any action which would require disclosure on Section 2.8 of the Disclosure Schedule orfollowing:
(ia) take amend its articles of organization or omit to take any action that results or may reasonably be expected to result in any of the representations and warranties of Seller or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfiedlimited liability company agreement;
(iib) amend acquire any assets of a type or otherwise change in a manner that is inconsistent with the organizational documents scope and purpose of Sellerits business;
(iii) (A) authorize, issue, sell or transfer any membership interests or other securities of Seller, (B) adjust, split, combine or reclassify or otherwise amend the terms of any membership interest or other security of Seller, (C) declare, authorize, set aside make or pay any dividend or other distribution (whether in cash, stock or other property) or (D) enter into any agreement with respect to the voting of any equity of Seller;
(iv) (Ac) merge or consolidate with any other Person, acquire or recapitalize;
(d) sell all or substantially all of its assets;
(e) issue additional membership interests or admit additional Persons as members;
(f) borrow money, take any business loans or assets refinance any borrowings, or execute and deliver on its own behalf any obligations, agreements, instruments or other documents of any other Person (whether by mergercharacter relating to any indebtedness, stock purchase, asset purchase loans or other business combination)borrowings, including, mortgages, notes, deeds, trust indentures, guarantees and assignments, or pledge, mortgage or encumber its membership interests or any of its assets as security for any such borrowings, loans, guarantees or other assistance (in each case, other than the purchase of supplies as contemplated by any Licenses entered into in the Ordinary Course of Business or (B) form any new Subsidiary;
(v) (A) materially change the operation of the Business, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of business;
(vi) make any loans, advances or capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of BusinessCourse);
(vii) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employees, (Bg) enter intointo any Contract with ▇▇▇▇▇▇ ▇▇▇▇▇▇, amend ▇▇▇▇▇ ▇▇▇▇▇ or waive any rights under any employmentEntity, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause)other than as contemplated by the Transaction Documents;
(viiih) make any material Tax election or change any method of Tax accounting;
(i) directly or indirectly: (i) sell, convey, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on pledge or otherwise encumber or dispose of the Transferred JV Interest, (ii) deposit such Transferred JV Interest into a voting trust or enter into a voting agreement or arrangement with respect to such Transferred JV Interest or grant any Assetsproxy with respect thereto or (iii) enter into any Contract with respect to the direct or indirect acquisition or sale, assignment, transfer or other than in the Ordinary Course disposition of Businesssuch Transferred JV Interest;
(ixj) acquire declare, set aside, make or pay any real dividend or other distribution, payable in cash, stock, property or undertake otherwise; or
(k) agree, authorize or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur any Indebtedness or issue any debt securities or warrants or other rights to acquire debt securities of Seller or assume, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person for Indebtedness or capital obligations, in the case of do any of the foregoing;
(xii) cancel any debts owed to or claims held by Seller in excess of $35,000;
(xiii) abandon, disclaim, dedicate to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreement;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;
(xv) revalue any of the assets of the Seller, except as required by GAAP, or enter into, or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contract;
(xvi) (A) change any method of accounting or accounting practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Business;
(xvii) make, revoke or change any Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date;
(xviii) modify, amend or terminate (other than pursuant to the expiration of its term other than as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunder;
(xix) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property;
(xx) commence, settle or compromise any Proceeding;
(xxi) cancel, materially reduce or fail to maintain any insurance policy;
(xxii) change or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;
(xxiii) engage in any transaction with any Related Parties; or
(xxiv) authorize or enter into any agreement, commitment or understanding (whether written or oral) with respect to the foregoing.
Appears in 1 contract
Sources: Membership Interest Purchase Agreement (B. Riley Financial, Inc.)
Interim Operations. (a) From and after the date hereof until and prior to the earlier of the Closing or termination of this Agreement or the consummation of the Merger, the businesses of the Company and its Subsidiaries shall be operated and conducted in the ordinary course, except as otherwise contemplated by this Agreement, Seller as set forth in Schedule 7.1 of the Company Disclosure Letter, as required by applicable Laws or as Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, conditioned or delayed). Parent shall not take or permit any of its Subsidiaries (including, for the purpose of this sentence, the Company or its Subsidiaries) to take any action or omit to take any action that is reasonably likely to (i) operate result in any of the Business only conditions of the Merger set forth in the Ordinary Course of Business, including maintaining appropriate service levels, and in compliance with applicable Law including any COVID-19 Measures; and Article VIII not being satisfied or (ii) use commercially reasonable efforts to (A) maintain and preserve intact prevent the business organization and goodwill consummation of the Business, the Assets and the Assumed Liabilities, (B) maintain satisfactory relationships with Seller’s clients, operators, distributors, customers, insurance underwriters and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services of, the Business Employees.
(b) Merger. Without limiting the generality of the foregoing, except as set forth in Section 5.1(b) of the Disclosure Schedule, as expressly permitted by this Agreement or as approved in writing by ▇▇▇▇▇, from and after the date hereof until and prior to the earlier of the Closing or the termination of this AgreementAgreement or the consummation of the Merger, Seller the Company shall not, and shall not take any action which would require disclosure on Section 2.8 of the Disclosure Schedule or:
(i) take or omit to take any action that results or may reasonably be expected to result in permit any of the representations and warranties of Seller or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfied;
(ii) amend or otherwise change the organizational documents of Seller;
(iii) (A) authorizeits Subsidiaries to, issue, sell sell, pledge, grant, transfer, encumber or transfer otherwise dispose of any membership interests shares of capital stock or other equity interests of the Company or any of its Subsidiaries, or securities of Sellerconvertible into or exchangeable or exercisable for, (B) adjustor options, splitwarrants, combine calls, commitments or reclassify or otherwise amend the terms rights of any membership interest kind to acquire, any shares of capital stock or other security equity interests of Seller, (C) the Company or any of its Subsidiaries or declare, authorize, set aside make or pay any dividend or other distribution (whether payable in cash, stock or other propertyproperty (or any combination thereof) or (D) enter into any agreement with respect to the voting of any its capital stock or other equity of Seller;
interests (iv) (A) merge except dividends or consolidate with any other Person, acquire any business or assets of any other Person (whether by mergerdistributions in cash, stock purchase, asset purchase or other business combination), other than the purchase of supplies in the Ordinary Course of Business or (B) form any new Subsidiary;
(v) (A) materially change the operation of the Business, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of business;
(vi) make any loans, advances or capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of Business);
(vii) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on or otherwise encumber any Assets, other than in the Ordinary Course of Business;
(ix) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur any Indebtedness or issue any debt securities or warrants or other rights to acquire debt securities of Seller or assume, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person for Indebtedness or capital obligations, in the case of any of the foregoing;
(xii) cancel any debts owed to or claims held paid by Seller in excess of $35,000;
(xiii) abandon, disclaim, dedicate to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreement;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;
(xv) revalue any of the assets of the Seller, except as required by GAAP, or enter into, or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contract;
(xvi) (A) change any method of accounting or accounting practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Business;
(xvii) make, revoke or change any Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner wholly-owned Subsidiary of equity interests in Buyer) after the Closing Date;Company to the Company or to any other direct or indirect wholly-owned Subsidiary of the Company).
(xviiib) modifyNothing contained in this Agreement is intended to give Parent or Merger Sub, amend directly or terminate (other than pursuant indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the expiration Effective Time, and notwithstanding anything to the contrary contained in this Agreement, no consent of its term other than as a result of any action taken by Seller, Parent or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunder;
(xix) fail to pay any Merger Sub will be required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property;
(xx) commence, settle or compromise any Proceeding;
(xxi) cancel, materially reduce or fail to maintain any insurance policy;
(xxii) change or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;
(xxiii) engage in any transaction with any Related Parties; or
(xxiv) authorize or enter into any agreement, commitment or understanding (whether written or oral) with respect to any matter set forth in this Agreement to the foregoingextent the requirement of such consent would violate any applicable Law. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its operations and the operations of its Subsidiaries.
Appears in 1 contract
Sources: Merger Agreement (Voltari Corp)
Interim Operations. (a) From the date hereof until the earlier of the Closing or termination of this AgreementAcceptance Time, Seller shall (i) operate the Business only in the Ordinary Course of Business, including maintaining appropriate service levels, and in compliance with applicable Law including any COVID-19 Measures; and (ii) use commercially reasonable efforts to except (A) maintain and preserve intact the business organization and goodwill of the Business, the Assets and the Assumed Liabilitiesas may be required by applicable Law, (B) maintain satisfactory relationships with Seller’s clientsthe prior written consent of Parent (which consent shall not unreasonably be withheld, operators, distributors, customers, insurance underwriters and other third parties having business dealings with Sellerconditioned or delayed), (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay as expressly contemplated by this Agreement, or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services of, the Business Employees.
(b) Without limiting the generality of the foregoing, except as set forth in Section 5.1(b5.1(a) of the Company Disclosure Schedule, as expressly permitted by this Agreement or as approved in writing by ▇▇▇▇▇, from (x) the date hereof until Company shall cause the earlier business of the Closing or Company and its Subsidiary to be conducted in the termination ordinary course consistent with past practice and, to the extent consistent therewith, the Company shall use reasonable best efforts to (i) preserve intact its and its Subsidiary’s present business organization and maintain the current relationships with Governmental Entities and other Persons having business dealings with the Company and its Subsidiary, (ii) prepare and file any requisite regulatory filings with any Regulatory Authority on a timely basis and consistent with their respective past practices and (iii) obtain and maintain quantities of this Agreementeach finished Company Pharmaceutical Product and related raw materials and components that the Company reasonably expects to be required for use in the ongoing and anticipated phase 2 and phase 3 clinical trials of each Company Pharmaceutical Product and (y) without limiting the generality of clause (x) above and in furtherance thereof, Seller the Company shall not take any action which would require disclosure on Section 2.8 of the Disclosure Schedule orand shall not permit its Subsidiary to:
(i) take amend its certificate of incorporation, bylaws or omit to take any action that results or may reasonably be expected to result in any of the representations and warranties of Seller or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfiedcomparable governing documents;
(ii) amend merge or otherwise change consolidate the organizational documents of SellerCompany or its Subsidiary with any other Person, except for such transactions between the Company and its Subsidiary, or dissolve or completely or partially liquidate;
(iii) form any Subsidiary or acquire assets from any other Person with a value or purchase price in the aggregate in excess of $300,000 in any transaction or series of related transactions, other than acquisitions in the ordinary course of business consistent with past practice with a value or purchase price in the aggregate not in excess of $300,000 or pursuant to Material Contracts in effect as of the date hereof;
(iv) issue, sell, pledge, dispose of, grant, transfer or encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer or encumbrance of, any shares of capital stock of the Company or its Subsidiary, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, other than (A) authorize, issue, sell issuance or transfer any membership interests sales of Shares upon exercise of the Company Options or other securities the vesting of Seller, Company Restricted Stock or (B) adjustas permitted under Section 5.1(a)(xviii);
(v) other than in the ordinary course of business consistent with past practice, split, combine create or reclassify incur any Lien on (i) any assets (other than Company Intellectual Property) of the Company or otherwise amend the terms its Subsidiary having a value in excess of any membership interest or other security of Seller$300,000, (Cii) any material Intellectual Property of the Company or its Subsidiary, or (iii) material Intellectual Property licensed to the Company or its Subsidiary;
(vi) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than the Company or its Subsidiary) in excess of $300,000 in the aggregate;
(vii) (A) declare, authorizeaccrue, set aside aside, make or pay any dividend or other distribution (whether payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for dividends paid by the Company’s Subsidiary to the Company), (B) repurchase, redeem or otherwise reacquire any shares of capital stock or other property) securities, or subdivide, reclassify, recapitalize, split, combine or exchange or enter into any similar transaction with respect to any of its capital stock or other securities or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or other securities, except for any split, combination or reclassification of capital stock of a wholly owned Subsidiary of the Company, or any issuance or authorization or proposal to issue or authorize any securities of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company, or (DC) enter into any agreement with respect to the voting of any equity of Seller;
(iv) (A) merge or consolidate with any other Person, acquire any business or assets of any other Person (whether by merger, stock purchase, asset purchase or other business combination), other than the purchase of supplies in the Ordinary Course of Business or (B) form any new Subsidiary;
(v) (A) materially change the operation of the Business, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of business;
(vi) make any loans, advances or its capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of Business);
(vii) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause)stock;
(viii) transfer, lease, licenseincur any indebtedness for borrowed money or assume, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on endorse or otherwise encumber any Assetsbecome liable or responsible for (whether directly, other than in the Ordinary Course of Business;
(ix) acquire any real property contingently or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become due, or (Dotherwise) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur any Indebtedness Person’s indebtedness for borrowed money, or issue or sell any debt securities or warrants or other rights to acquire any debt securities security of Seller the Company or assumeits Subsidiary, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person except for Indebtedness or capital obligations, indebtedness for borrowed money incurred in the case ordinary course of business consistent with past practice not to exceed $300,000 in the aggregate;
(ix) except as contemplated in capital budgets furnished to Parent prior to the date of this Agreement, make any capital expenditures in excess of $300,000 in the foregoingaggregate;
(x) make any changes with respect to accounting policies or procedures other than as required by changes in GAAP;
(xi) settle any litigation for an amount in excess of $300,000;
(xii) cancel other than as reasonably necessary to facilitate the research and/or clinical operations of the Company in a manner consistent with the Company’s operating budgets furnished to Parent prior to the date of this Agreement, enter into any debts owed Contract that would have been a Material Contract had it been entered into prior to or claims held by Seller in excess of $35,000this Agreement;
(xiii) abandon, disclaim, dedicate other than as reasonably necessary to facilitate the research and/or clinical operations of the Company in a manner consistent with the Company’s operating budgets furnished to Parent prior to the publicdate of this Agreement, sellamend, assign modify or grant terminate any security interest in, to or under any Business Intellectual Property or Business IP AgreementMaterial Contract;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to Contracts in effect prior to the date hereof, transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any material assets, licenses, operations, rights or businesses of the Company or its Subsidiary, except for (A) sales, transfers or dispositions of obsolete or worthless assets or (B) sales, transfers, leases, licenses or other dispositions of assets with a written agreement with fair market value not in excess of $300,000 in the Selleraggregate;
(xv) revalue assign or grant an exclusive license of any material right in any Company Intellectual Property necessary or useful for the manufacture, use, sale, offer for sale or importation of any Company Pharmaceutical Products or that otherwise enables a third party to compete with the assets Company with respect to the manufacture or sale of the Seller, except as required by GAAP, or enter into, or permit any of the assets of the Seller to become bound by product that competes with any Contract that is or would constitute a Material ContractCompany Pharmaceutical Product;
(xvi) waive any inbound license in any IP Contract under any Patent or other Company Intellectual Property material to any Company Pharmaceutical Product and, other than in the ordinary course of business consistent with past practice, (A) amend any inbound license in any IP Contract under any Patent or other Company Intellectual Property material to any Company Pharmaceutical Product or (B) enter into any Contract that would constitute an IP Contract if entered into prior to the date of this Agreement;
(xvii) except as contemplated in operating budgets furnished to Parent prior to the date of this Agreement, commence (other than planning) or alter, in a manner that would materially increase the expenditures to be made by the Company in connection therewith, any new Phase I, Phase II, Phase III or Phase IV human clinical trial (including initiation of a new institutional review board) involving any Company Pharmaceutical Product;
(xviii) except as required by applicable Law or otherwise required pursuant to existing Contracts or Benefit Plans in effect as of the date hereof and made available to Parent, (A) increase the salaries or wages of any Employee, except in the ordinary course of business consistent with past practice, (B) promote any Employee except in order to fill a position vacated after the date of this Agreement, (C) pay any bonus to any Employee other than a bonus pursuant to Section 5.8(f), (D) enter into or establish any new employment agreement or change in control severance agreement with any method of accounting or accounting practiceEmployee, other than changes with any new Employee hired to replace an Employee who is party to any such agreement, (E) make any severance payments to any Employee in excess of what they are contractually entitled to, (F) make any new equity awards to any Employee or accelerate the vesting under any equity compensation plan (except for vesting accelerated pursuant to Section 3.3 of this Agreement), (G) other than in accordance with Section 5.1(a)(xviii)(D), establish, adopt, terminate or materially amend any Benefit Plan, (H) hire any employee at the level of Vice President or above, (I) hire any employee in a sales, general or administrative capacity with an annual base salary in excess of $150,000, or (J) hire any employee (other than an employee described in clause “(I)” above) with an annual base salary in excess of $250,000;
(xix) except as required under by applicable Law Law, make, change or GAAP rescind any material Tax election, file any amended material Tax Return, settle or compromise any material Tax liability, agree to an extension or waiver of the statute of limitations with respect to material Taxes, enter into any closing agreement with respect to a material Tax, surrender any right to claim a material Tax refund, or change any material method of Tax accounting;
(xx) enter into or consummate any tax planning or restructuring transaction which involves any transfer, assignment or other disposition of any Company Intellectual Property;
(xxi) (A) waive or amend (except in the course of diligently prosecuting the Company Intellectual Property) the Company’s rights in or to any Company Intellectual Property owned by the Company or its Subsidiary that is registered or the subject of an application for registration, (B) fail to diligently prosecute or maintain any material Company Intellectual Property owned by the Seller’s booksCompany or its Subsidiary that is registered or the subject of an application for registration, accounts and records in each case in the Ordinary Course name of Business;
Company or its Subsidiary or (xvii) make, revoke or change any Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date;
(xviii) modify, amend or terminate (other than pursuant to the expiration of its term other than as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunder;
(xixC) fail to pay make any required maintenance or other similar fees or otherwise fail payments in accordance with the terms of any IP Contract pursuant to make required filings or payments required to maintain and further prosecute which the Company licenses any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned material Intellectual Property;
(xx) commence, settle or compromise any Proceeding;
(xxi) cancel, materially reduce or fail to maintain any insurance policy;
(xxii) change or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration qualify any new site for manufacturing of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;Company Pharmaceutical Product; or
(xxiii) engage in any transaction with any Related Parties; or
(xxiv) authorize or enter into any agreementContract to do any of the foregoing.
(b) Each of Parent and Merger Sub, commitment subject to the limitations set forth in Section 5.4(e)(ii), on the one hand, and the Company, on the other hand, agrees that, except as otherwise provided in this Agreement, it shall not knowingly take any action that would reasonably be expected to prevent or understanding delay the consummation of the Offer, the Merger and the other Transactions in accordance with the terms of this Agreement. Without limiting the generality of the foregoing, each of Parent and Merger Sub agrees that, after the date hereof and prior to the Effective Time, it shall not consummate or agree to consummate any purchase or other acquisition of any assets, licenses, operations, rights or businesses that, individually or in the aggregate with any other such purchase or acquisition, would reasonably be expected to (whether i) prevent or delay the parties hereto from obtaining any consents, registrations, approvals, permits or authorizations required to be obtained from any Governmental Entity in connection with the consummation of the Offer, the Merger and the other Transactions, (ii) result in the imposition of a condition or conditions on any such consents, registrations, approvals, permits or authorizations, or (iii) otherwise prevent or delay any party hereto from performing its obligations hereunder or consummating the Offer, the Merger and the other Transactions.
(c) The Company shall promptly notify Parent and Merger Sub of any significant data relating to the Key Product, including information related to any significant adverse events with respect to the Key Product.
(d) Each party hereto shall promptly advise the other parties hereto of any Proceeding or material claim threatened, commenced or asserted against or with respect to any such party relating to the Transactions and promptly provide the parties hereto with copies of all material complaints, pleadings and filings related thereto.
(e) From the date hereof until the Acceptance Time, the Company shall (i) consult with Parent in connection with any proposed meeting with the FDA or any other Governmental Entity relating to any Company Pharmaceutical Product, (ii) promptly inform Parent of, and provide Parent with a reasonable opportunity to review, any material filing proposed to be made by or on behalf of any of the Company or its Subsidiary, and any material correspondence or other material communication proposed to be submitted or otherwise transmitted to the FDA or any other Governmental Entity by or on behalf of any of the Company or its Subsidiary, in each case relating to any Company Pharmaceutical Product, (iii) keep Parent promptly informed of (A) any communication (written or oral) with respect or from the FDA and any other Governmental Entity and (B) any material communications (written or oral) received from any Person relating to the foregoingCompany Intellectual Property and (iv) promptly inform Parent and provide Parent or Merger Sub with a reasonable opportunity (but no more than three (3) Business Days) to comment, in each case, prior to making any material change to any study protocol, adding any new trial, making any material change to a manufacturing plan or process, making any material change to a development timeline or initiating, or making any material change to, promotional or marketing materials or activities relating to any Company Pharmaceutical Product.
(f) Notwithstanding the above, the delivery of any notice pursuant to Section 5.1(b), 5.1(c), 5.1(d) or 5.1(e) shall not limit or otherwise affect the representations, warranties, covenants or agreements of the parties hereto, the remedies available hereunder to the party hereto receiving such notice or the conditions to such party's obligation to consummate the Offer, the Merger or any of the other Transactions.
(g) Nothing contained in this Agreement shall give Parent or Merger Sub, directly or indirectly, the right to control the Company or its Subsidiary or direct the business or operations of the Company or its Subsidiary prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its operations and the operations of its Subsidiary. Nothing in this Agreement, including any of the actions, rights or restrictions set forth herein, shall be interpreted in such a way as to place the Company, Parent or Merger Sub in violation of any rule, regulation or policy of any Governmental Entity, including any applicable Law.
Appears in 1 contract
Interim Operations. Except as permitted by the terms of the Merger Agreement, as set forth in the Company's confidential disclosure letter delivered pursuant to the Merger Agreement, as required by applicable law, any Governmental Entity of competent jurisdiction or the rules or regulations of NASDAQ, or unless Parent has otherwise agreed in writing (a) From which agreement shall not be unreasonably withheld, delayed or conditioned), the Company has agreed that, from the date hereof of the Merger Agreement until the earlier Effective Time, the Company will, and will cause each of the Closing or termination of this Agreementits subsidiaries to, Seller shall (i) operate the Business only conduct its operations in the Ordinary Course ordinary course of Businessbusiness, including maintaining appropriate service levels, and in compliance substantially consistent with applicable Law including any COVID-19 Measures; past practice and (ii) use commercially reasonable efforts to (A) maintain and preserve substantially intact the its business organization insurance coverage, business relationships and the goodwill of the Business, the Assets and the Assumed Liabilities, (B) maintain satisfactory those having business relationships with Seller’s clients, operators, distributors, customers, insurance underwriters and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or performit, in all material respectseach case, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available to the services of, extent permitted by the Business Employees.
(b) Merger Agreement. Without limiting the generality of the foregoing, except as permitted by the terms of the Merger Agreement, as set forth in Section 5.1(b) the Company's confidential disclosure letter, as required by applicable law, any Governmental Entity of competent jurisdiction or the rules or regulations of NASDAQ, or unless Parent has otherwise consented in writing (which consent shall not be unreasonably withheld, delayed or conditioned), between the date of the Disclosure ScheduleMerger Agreement and the Effective Time, as expressly permitted by this Agreement or as approved in writing by ▇▇▇▇▇the Company shall not, from the date hereof until the earlier of the Closing or the termination of this Agreement, Seller and shall not take permit any action which would require disclosure on Section 2.8 of its subsidiaries to: • amend its certificate of incorporation, by-laws or equivalent organizational or governing documents; • issue or authorize the Disclosure Schedule or:
issuance of any equity securities in the Company or any of its subsidiaries, or securities convertible into, or exchangeable or exercisable for, any such equity securities, or any rights of any kind to acquire any such equity securities or such convertible or exchangeable securities, other than (i) take or omit to take any action that results or may reasonably be expected to result the issuance of Shares upon the exercise of Options and the vesting of RSUs and Performance Awards, in any each case outstanding as of the representations and warranties of Seller or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any date of the conditions set forth herein not being satisfied;
Merger Agreement or otherwise permitted to be granted under the Merger Agreement, (ii) amend or otherwise change grants of Options, Restricted Stock, RSU Awards and Performance Awards in each case that are required to be granted pursuant to agreements already in effect as of the organizational documents date of Seller;
the Merger Agreement and (iii) (A) authorizegrants of Options, issueRestricted Stock, sell or transfer any membership interests or other securities RSU Awards and Performance Awards in each case in the ordinary course of Seller, (B) business substantially consistent with past practice and not in excess of the amount set forth in the Company's confidential disclosure letter; • adjust, split, combine combine, recapitalize or reclassify or otherwise amend the terms of any membership interest capital stock or other security equity interest; • other than in the ordinary course of Sellerbusiness, (C) sell, pledge, dispose of, transfer, lease, license or encumber any material property or material assets of the Company or any of its subsidiaries, except pursuant to existing contracts; • declare, authorizeset aside, set aside make or pay any dividend or other distribution (whether in cash, stock or other property) or (D) enter into any agreement with respect to the voting capital stock of the Company, whether payable in cash, stock, property or a combination thereof; • other than (i) in connection with the exercise of any outstanding Options permitted by the terms of such Options, or the payment of related withholding taxes, by net exercise or by the tendering of shares, or tax withholdings on the vesting or payment of Restricted Stock, RSUs and Performance Awards or (ii) the purchase of shares pursuant to existing "10b5-1" plans, reclassify, combine, split, subdivide or amend the terms of, or redeem, purchase or otherwise acquire, directly or indirectly, any of its equity of Seller;
(iv) (A) securities or any options, warrants, securities or other rights exercisable for or convertible into any such equity securities; • merge or consolidate the Company or any of its subsidiaries with any person or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, restructuring, recapitalization or other Personreorganization of the Company, acquire other than the merger of one or more of its subsidiaries with or into one or more of its other subsidiaries; • make or offer to make any acquisition of a material business or assets of any other Person (whether including by merger, consolidation or acquisition of stock purchase, asset purchase or other business combinationassets), other than the purchase any acquisitions for consideration that is individually not in excess of supplies $5 million, or in the Ordinary Course aggregate not in excess of Business $10 million; • incur any indebtedness or issue any debt securities, or assume or guarantee the obligations of any person (other than a wholly owned subsidiary of the Company) for borrowed money, except (i) in connection with refinancings of existing indebtedness in an amount not to exceed $5 million in the aggregate outstanding at any one time, (ii) for borrowings (including letters of credit and performance bonds) in the ordinary course of business, consistent with past practice, in an amount not to exceed $5 million in the aggregate outstanding at any one time, (iii) indebtedness for borrowed money that is prepayable at any time without penalty or premium, in an amount not to exceed $5 million in the aggregate outstanding at any one time or (Biv) form any new Subsidiary;
(v) (A) materially change for foreign exchange ▇▇▇▇▇▇ and related contracts entered into in the operation of the Business, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line ordinary course of business;
(vi) ; • make any loans, advances or capital contributions to, or investments in, any Person other person (other than advances any wholly owned subsidiary of expenses to Business Employees the Company) other than loans made in the Ordinary Course ordinary course of Business);
(vii) (A) institute or announce any increase business not to exceed $5 million in the aggregate; • except to the extent required by law or the terms of any of the Company benefit plan or as specifically contemplated by the Merger Agreement: (i) other than as required by any agreement in effect as of the date of the Merger Agreement, increase the compensation or benefits payable or to become payable to its directors, officers or employees in an aggregate amount in excess of the limits set forth on the Company's confidential disclosure letter; (ii) other than in the ordinary course of business in connection with the hiring of new employees, grant any rights to severance or termination pay or other termination benefit, or enter into any employment or severance agreement; (iii) except for amendments to any of the Company benefit plans in the ordinary course of business, establish, terminate, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, pension, retirement, deferred compensation, bonuses employment, termination, severance, change-in-control or other benefits payable plan or agreement; or (iv) take any action to any Business Employees, (B) enter into, amend or waive any rights performance or vesting criteria or accelerate vesting, exercisability or funding under any employmentof the Company benefit plan; • except in each case to the extent required by law, consultingfile any material tax return materially inconsistent with past practice, severance make any material tax election inconsistent with past practice, change any material tax election, change any annual tax accounting period, adopt or change any material method of control agreement with tax accounting, enter into any Business Employeeclosing or similar agreements relating to a material amount of taxes, (C) grant accept or approve any severance or termination pay (cash, equity or otherwise) material proposed adjustment to any Business Employeetax liability, materially amend any material tax return, surrender any right to claim a material tax refund or consent in writing to any extension or waiver of the statute of limitations applicable to any material tax claim or assessment (D) enter into, adopt, amend except for any such consent given in the ordinary course of business); • make any material change in accounting policies or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on or otherwise encumber any Assetsprocedures, other than in the Ordinary Course of Business;
(ix) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur any Indebtedness or issue any debt securities or warrants or other rights to acquire debt securities of Seller or assume, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person for Indebtedness or capital obligations, in the case of any of the foregoing;
(xii) cancel any debts owed to or claims held by Seller in excess of $35,000;
(xiii) abandon, disclaim, dedicate to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreement;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;
(xv) revalue any of the assets of the Seller, except as required by GAAP, applicable law or enter into, any Governmental Entity with competent jurisdiction; • make any capital expenditures that individually or in the aggregate exceed $15 million; • terminate or permit any of the assets of the Seller Company permits to become bound by any Contract that is or would constitute a Material Contract;
(xvi) (A) change any method of accounting or accounting practicelapse, other than changes required under applicable Law or GAAP or (B) fail to maintain in accordance with the Seller’s books, accounts terms and records in the Ordinary Course of Business;
(xvii) make, revoke or change any Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date;
(xviii) modify, amend or terminate (other than pursuant to the regular expiration of its term other than as a result any of any action taken by Sellerthe Company permits, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunder;
(xix) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect apply on a timely basis for any Owned Intellectual Property;
(xx) commencerenewal of any renewable Company permits, settle except to the extent such termination, lapse or compromise any Proceeding;
(xxi) cancel, materially reduce or fail failure to maintain any insurance policy;
(xxii) change or modify apply for renewal would otherwise have been permitted to occur in the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration ordinary course of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;
(xxiii) business; • engage in any transaction with any Related Parties; or
(xxiv) authorize with, or enter into any agreement, commitment arrangement or understanding (whether written with any affiliate of the Company or oral) other person covered by Item 404 of Regulation S-K promulgated under the Exchange Act that would be required to be disclosed under such Item 404 other than those in existence on the date of the Merger Agreement; • fail to use reasonable best efforts to maintain in full force and effect insurance policies of the type and with respect generally comparable coverage to such insurance policies in place on the date of the Merger Agreement; • subject to the foregoing.other provisions of the Merger Agreement, settle or compromise any proceeding or series of proceedings, individually or in the aggregate, in an amount in excess of $2,500,000 (net of any amount covered by insurance or indemnification); • enter into any pay or performance guarantees or agreements to indemnify any other person, other than (i) pay or performance guarantees or agreements to indemnify under which neither the Company nor any of its subsidiaries will have any obligations following the Effective Time or
Appears in 1 contract
Interim Operations. (a) From The Company covenants and agrees as to itself and its Subsidiaries that, from and after the date hereof until execution of this Agreement and prior to the earlier Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as otherwise expressly disclosed in Section 6.1(a) of the Closing or termination Company Disclosure Letter), the business of this Agreement, Seller the Company and its Subsidiaries shall (i) operate the Business only be conducted in the Ordinary Course ordinary course of Businessbusiness consistent with past practice and each of the Company and its Subsidiaries shall, including maintaining appropriate service levels, and in subject to compliance with applicable Law including any COVID-19 Measures; and (ii) the specific matters set forth below, use commercially reasonable best efforts to (A) maintain and preserve intact the its business organization intact and maintain the existing relations and goodwill of the Businesswith Governmental Entities, the Assets and the Assumed Liabilitiescustomers, (B) maintain satisfactory relationships with Seller’s clientssuppliers, operatorscontent providers, distributors, customerslicensors, insurance underwriters creditors, lessors, employees and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, associates and keep available the services of, of the Business Employees.
(b) Company and its Subsidiaries’ present employees and agents. Without limiting the generality of of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the Effective Time, except (A) as set forth Parent may approve in writing (such approval not to be unreasonably withheld, conditioned or delayed), (B) as expressly disclosed in Section 5.1(b6.1(a) or (d) of the Company Disclosure Schedule, Letter or (C) as expressly permitted by this Agreement or as approved provided for in writing by ▇▇▇▇▇, from the date hereof until the earlier of the Closing or the termination of this Employee Matters Agreement, Seller the Company shall not take any action which would require disclosure on Section 2.8 of the Disclosure Schedule orand will not permit its Subsidiaries to:
(i) take or omit to take any action that results or may reasonably be expected to result in any of the representations and warranties of Seller or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfied;
(ii) amend or otherwise change the organizational documents of Seller;
(iii) (A) authorize, issue, sell amend its certificate of incorporation or transfer any membership interests bylaws (or other securities of Sellercomparable governing documents), (B) adjust, split, combine combine, subdivide or reclassify or otherwise amend the terms its outstanding shares of any membership interest or other security of Sellercapital stock, (C) declare, authorize, set aside make or pay any dividend or other distribution (whether payable in cash, stock or other propertyproperty (or any combination thereof) in respect of any shares of its capital stock (except for any dividends or distributions paid by Sky Brasil Servicios Ltda. or a direct or indirect wholly owned Subsidiary of the Company to its stockholders or unitholders on a pro rata basis in the ordinary course of business consistent with past practice), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any equity shares of Sellerits capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock;
(iv) (Aii) merge or consolidate with any other Person, acquire except for any business such transactions among wholly owned Subsidiaries of the Company, or assets restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or business;
(iii) knowingly take or omit to take any action if such action or failure to act would be reasonably likely to prevent or impede the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code;
(iv) (A) establish, adopt, amend or terminate any Company Plan or amend the terms of any other Person (whether by mergeroutstanding equity-based awards, stock purchase, asset purchase or other business combination), other than the purchase of supplies in the Ordinary Course of Business or (B) form grant or provide any new Subsidiaryseverance or termination payments or benefits to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, except to comply with applicable Law or as expressly required by the provisions of the Company Plans as in effect on the date hereof or the provisions of this Agreement, (C) increase the compensation, bonus or pension, welfare, severance or other benefits of or pay any bonus to any director, officer or employee of the Company or any of its Subsidiaries, (D) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Plan (including any equity-based awards), except to the extent expressly required by any such Company Plan or provided in this Agreement, (E) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or to comply with applicable Law, or (F) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(v) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) materially change indebtedness for borrowed money incurred in the operation ordinary course of business consistent with past practice not to exceed $25,000,000 in the Businessaggregate on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, Assets or the Assumed Liabilities or any method of purchasetaken as a whole, salethan existing indebtedness for borrowed money, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into indebtedness for borrowed money in replacement of existing indebtedness for borrowed money which has matured or is scheduled to mature within the twelve month period following such incurrence of indebtedness at the then prevailing market rates and on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a new line whole, than the indebtedness being replaced or (C) guarantees incurred in compliance with this Section 6.1 by the Company and its Subsidiaries of business or abandon or discontinue an existing line indebtedness of businessits wholly owned Subsidiaries;
(vi) make or commit to any capital expenditures other than in the ordinary course of business consistent with past practice and in the aggregate in any event not in excess of (A) in 2014, 110% of the aggregate amounts reflected in the Company’s capital expenditure budget set forth in Section 6.1(a)(vi)(A) of the Company Disclosure Letter (the “2014 CapEx Budget”) and (B) in 2015, the sum of (1) the remainder (if a positive number) of (x) 100% of the 2014 CapEx Budget minus (y) the actual amount the Company made or committed to pursuant to the preceding clause (A) plus (2) 110% of the Company’s 2015 capital expenditure budget set forth in Section 6.1(a)(vi)(B) of the Company Disclosure Letter; provided that the Company’s timing of such capital expenditures in 2015 shall be consistent with past practice.
(vii) other than transfers among and between wholly owned Subsidiaries of the Company, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien (other than Permitted Liens) upon or otherwise dispose of any of their respective properties or assets (including capital stock of any of its Subsidiaries) with a fair market value in excess of $50,000,000 individually or $100,000,000 in the aggregate (except with respect to Intellectual Property that is material to the respective businesses of the Company or its Subsidiaries, which shall not be included in this exception) or that are otherwise material other than ordinary course sales of customer premises equipment, or, with respect to Intellectual Property, non-exclusive license grants, in each case, made in the ordinary course of business consistent with past practice;
(viii) issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer on encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares except any Shares issued pursuant to Company Options, Company SARs, Company Restricted Stock Units, Company Performance Stock Units and Company Awards outstanding on the date of this Agreement expressly required by the existing terms or such awards and the Company Stock Plans;
(ix) other than acquisitions of inventory or assets in the ordinary course of business consistent with past practice and making or committing to any capital expenditures in compliance with Section 6.1(a)(vi), spend in excess of $50,000,000 individually or $200,000,000 in the aggregate to acquire any business or to acquire assets or other property, whether by merger, consolidation, purchase of property or assets or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Subsidiaries shall make any acquisition that would, or would reasonably be likely to prevent, delay or impair the Company’s ability to consummate the transactions contemplated by this Agreement;
(x) make any material change with respect to its accounting policies or procedures, except as required by changes in GAAP or by applicable Law;
(xi) except as required by applicable Law, (A) make any Tax election that is material to the Company and its Subsidiaries, taken as a whole, or take any position that is material to the Company and its Subsidiaries, taken as a whole, on any material Tax Return filed on or after the date of this Agreement; that is inconsistent with elections made or positions taken in preparing or filing similar Tax Returns in prior periods, (B) change any method of Tax accounting, which change is material to the Company and its Subsidiaries, taken as a whole, (C) amend any Tax Return with respect to an amount of Taxes that is material to the Company and its Subsidiaries, taken as a whole, or (D) settle or resolve any Tax controversy that is material to the Company and its Subsidiaries, taken as a whole;
(xii) (A) (1) enter into any new line of business other than any line of business that is reasonably ancillary to and a reasonably foreseeable extension of any line of business as of the date of this Agreement, or (2) start to conduct a line of business of the Company or any of its Subsidiaries in any geographic area where it is not conducted as of the date of this Agreement, other than starting to conduct a line of business of the Company or any of its Subsidiaries in geographic areas that are reasonable extensions to geographic areas where such business line is conducted as of the date of this Agreement (provided that in the case of each of clauses (1) and (2), such entry or expansion would not require the receipt or transfer of any License that would constitute a Communications License if issued or granted prior to the date hereof and would not reasonably be expected to prevent, delay (other than in a de minimis respect) or impair the ability of the Company, Parent and Merger Sub to complete the Merger on a timely basis) or (B) except as currently conducted, engage in the conduct of any business in any state which would require the receipt or transfer of a Communications License or License that would constitute a Communications License if issued or granted prior to the date hereof or in any foreign country that would require the receipt of a material License;
(xiii) file or apply for any License outside of the ordinary course of business consistent with past practice;
(xiv) other than in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000,000, make any loans, advances or capital contributions to, or investments in, any Person (other than loans, advances of expenses or capital contributions to Business Employees in the Ordinary Course of Business);
(vii) (A) institute Company or announce any increase in the compensation, bonuses direct or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on or otherwise encumber any Assets, other than in the Ordinary Course of Business;
(ix) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing indirect wholly owned Subsidiary of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur any Indebtedness or issue any debt securities or warrants or other rights to acquire debt securities of Seller or assume, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person for Indebtedness or capital obligations, in the case of any of the foregoing;
(xii) cancel any debts owed to or claims held by Seller in excess of $35,000;
(xiii) abandon, disclaim, dedicate to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreement;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof Company or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the SellerSky Brasil Servicios Ltda.);
(xv) revalue enter into any Contract pursuant to which the Company or any of its Subsidiaries agrees to provide any wireless, wireline or Internet services to any Person (other than Parent or its Subsidiaries) as an agent or reseller if such Contract is not terminable by the assets Company or one of the Seller, except as required by GAAP, its Subsidiaries on 60 days’ or enter into, or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contractless notice without penalty;
(xvi) (A) change any method of accounting or accounting practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course ordinary course of Businessbusiness, (a) amend or modify in any material respect or terminate (excluding terminations upon expiration of the term thereof in accordance with the terms thereof) any Material Contract or waive, release or assign any material rights, claims or benefits under any Material Contract and (b) enter into any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement unless it is on terms substantially consistent with, or on terms more favorable to the Company and/or its Subsidiaries (and to Parent and its Subsidiaries following the Closing) than, either a Contract it is replacing or a form of such Material Contract made available to Parent prior to the date hereof;
(xvii) makesettle any action, revoke suit, case, litigation, claim, hearing, arbitration, investigation or change any Tax election by Seller that could adversely impact the amount of Taxes due other proceedings before or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Datethreatened to be brought before a Governmental Entity;
(xviii) modifyassign, amend transfer, forfeit, cancel, fail to renew, or terminate (other than pursuant fail to extend or defend any Communications License that is material to the expiration of Company and its term other than as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunderSubsidiaries;
(xix) fail to pay enter into any collective bargaining agreement, unless required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Propertyby applicable Law;
(xx) commence, settle enter into any Contract that obligates or compromise purports to obligate any Proceeding;existing or future non-controlled Affiliate of the Company (including any parent entity) to grant licenses to any Intellectual Property; or
(xxi) cancelagree, materially reduce resolve or fail commit to maintain do any insurance policy;of the foregoing.
(xxiib) change Parent covenants and agrees, from and after the execution of this Agreement and prior to the Effective Time (unless the Company shall otherwise approve in writing, which approval will not be unreasonably withheld, conditioned or modify delayed and except as otherwise expressly contemplated by this Agreement or expressly disclosed in Section 6.1(b) of the SellerParent Disclosure Letter):
(i) Parent shall not (A) amend Parent’s creditcertificate of incorporation or bylaws in any manner that would prohibit or hinder, collection, impede or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) delay in any material respect the Merger or fail the consummation of the other transactions contemplated hereby or have a material and adverse impact on the value of the Parent Common Stock; provided that any amendment to its certificate of incorporation to increase the authorized number of shares of any class or series of the capital stock of Parent shall in no way be restricted by the foregoing, or (B) declare, set aside or pay any dividend or delay payment distribution payable in cash, stock or property in respect of payables any capital stock, other than regular quarterly cash dividends on the Parent Common Stock as described on Section 6.1(b)(i) of the Parent Disclosure Letter and other than dividends or other Liabilities in any material respectdistributions with a record date after the Effective Time;
(xxiiiii) engage in Parent shall not, and shall not permit any transaction with of its Subsidiaries to, acquire another business that, at the time such action is taken, to the Knowledge of Parent, would be likely to prevent the Closing;
(iii) Parent shall not knowingly take or omit to take any Related Partiesaction if such action or failure to act would be reasonably likely to prevent or impede the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code; or
(xxiviv) authorize Parent shall not agree, resolve, or enter into commit to do any agreement, commitment or understanding (whether written or oral) with respect to of the foregoing.
(c) (i) Officers of the Company shall, prior to the Effective Time, execute and deliver to each of S▇▇▇▇▇▇▇ & C▇▇▇▇▇▇▇ LLP and Weil, Gotshal & M▇▇▇▇▇ LLP a certificate substantially in the form of Section 6.1(c)(i) of the Company Disclosure Letter (with such changes as are necessary, in the opinion of such counsel, to reflect any change in applicable Law, regulation or official interpretation thereof occurring between the date hereof and the Closing Date).
Appears in 1 contract
Sources: Merger Agreement (Directv)
Interim Operations. (a) From After the date hereof until the earlier of the Closing or termination of this AgreementAgreement and prior to the Effective Time, Seller shall except (i) operate as required by applicable Laws, (ii) as otherwise expressly contemplated by this Agreement or (iii) as set forth in Section 7.1(a) of the Business only ANDX Disclosure Letter, each of the ANDX Parties will, and will cause its Subsidiaries to: (w) conduct its business in the Ordinary Course ordinary course of Businessbusiness consistent with past practice, including maintaining appropriate service levels, and in compliance with applicable Law including any COVID-19 Measures; and (iix) use commercially reasonable efforts to (A) maintain and preserve intact the its business organization and the goodwill of those having business relationships with it and retain the Business, the Assets services of its present officers and the Assumed Liabilitieskey employees, (By) maintain satisfactory relationships with Seller’s clients, operators, distributors, customers, insurance underwriters and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject use commercially reasonable efforts to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, comply in all material respectsrespects with all applicable Laws and the requirements of all ANDX Material Contracts, and (z) use commercially reasonable efforts to keep in full force and effect all material insurance policies maintained by or on behalf of the ANDX Parties and their Subsidiaries, other obligations when due, (D) maintain than changes to such policies made in effect all Permits and (E) maintain good relations with, and keep available the services of, the Business Employeesordinary course of business.
(b) Without limiting the generality of Section 7.1(a), after the foregoingdate of this Agreement and prior to the Effective Time, except (A) as required by applicable Laws, (B) as otherwise expressly contemplated by this Agreement or (C) as set forth in Section 5.1(b7.1(b) of the ANDX Disclosure ScheduleLetter, each of the ANDX Parties will not, and agrees that it will cause its Subsidiaries not to, in each case without the prior written consent of the MPLX Parties (which consent will not be unreasonably withheld, delayed or conditioned):
(i) adopt or propose any change to its Governing Documents or the Governing Documents of its Subsidiaries as in effect on the date of this Agreement, other than in immaterial respects in relation to any of their Subsidiaries;
(ii) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any equity securities of ANDX or any its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any equity securities or such convertible or exchangeable securities or interests;
(iii) subject to Section 7.13 and except for distributions to the holders of limited partnership units announced prior to the date of this Agreement or consistent with past practice (including regular quarterly distributions in respect of the ANDX Common Units), any distributions with respect to the TexNew Mex Units or ANDX Series A Preferred Units required by the terms of the ANDX Partnership Agreement or any distributions from a Subsidiary of an ANDX Party to ANDX or another Subsidiary of an ANDX Party, (A) declare, set aside or pay any distributions in respect of its equity securities or Rights, or (B) split, combine or reclassify any of its equity securities or Rights;
(iv) settle, propose to settle or compromise any action before a Governmental Entity if such settlement, proposed settlement or compromise (A) with respect to the payment of monetary damages, involves the payment of monetary damages that exceed $5,000,000 in the aggregate (together with all other settlements or compromises after the date of this Agreement), (B) that imposes any material equitable or non-monetary relief, penalty or restriction on any ANDX Party or any of their Subsidiaries (or, after the Effective Time, any MPLX Party or any of their Subsidiaries) or (C) that would reasonably be expected to affect the rights or defenses available to any ANDX Party or any of their Subsidiaries in any related or similar claims that, individually or in the aggregate, are material to the ANDX Parties and their Subsidiaries, taken as a whole;
(v) recommend, propose, announce, adopt or vote to adopt a plan of complete or partial dissolution or liquidation, in each case, that would (A) prevent or materially impede or delay the ability of the parties to satisfy any of the conditions to, or the consummation of, the transactions set forth in this Agreement or (B) adversely affect in a material way the rights of holders of the securities of any Party;
(vi) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of the ANDX Parties’ material assets, product lines or businesses or those of any of their Subsidiaries, including any equity interests of any of their Subsidiaries, except (other than with respect to equity interests of any Subsidiary) (A) in connection with goods or services provided in the ordinary course of business and sales of obsolete assets, or (B) for sales, leases, licenses or other dispositions of assets that (x) are contemplated in any budget that, as of the date hereof, has received the requisite approvals from the applicable governing bodies of ANDX or any of its Subsidiaries, (y) are in the ordinary course of business or (z) are with a fair market value not in excess of $10,000,000 in the aggregate;
(vii) except for the incurrence of indebtedness for borrowed money pursuant to any revolving line of credit of ANDX or any of its Subsidiaries (including the MPC Loan Agreement entered into by MPC and ANDX on December 21, 2018), (A) incur, assume or guarantee any indebtedness for borrowed money, (B) issue, assume or guarantee any debt securities, (C) grant any option, warrant or right to purchase any debt securities, or (D) issue any securities convertible into or exchangeable for any debt securities of others;
(viii) (A) amend, modify or terminate, or waive any material right under, any ANDX Material Contract with MPC or any of its Affiliates (other than ANDX or any of its Subsidiaries) or (B) enter into any Contract with MPC or any of its Affiliates (other than ANDX or any of its Subsidiaries) that would be a “material contract” pursuant to Item 601(b)(10) of Regulation S-K under the Securities Act;
(ix) make any change to its accounting policies or procedures, except as required by changes after the date hereof in accordance with GAAP;
(A) change its fiscal or taxable year or any method of Tax accounting, (B) make, change or revoke any material Tax election, (C) settle or compromise any material liability for Taxes, (D) file any material amended Tax Return, (E) enter into an arrangement with any Governmental Entity with respect to Taxes, (F) surrender any right to claim a refund for Taxes, (G) consent to an extension of the statute of limitations applicable to any Tax claim or assessment, or (H) take any action that would reasonably be expected to cause ANDX or any of its Subsidiaries to be treated, for U.S. federal income Tax purposes, as a corporation;
(xi) except as required pursuant to the terms of any ANDX Employee Benefit Plan or adopted pursuant to this Section 7.1(b)(x), or as otherwise required by applicable Law, (A) establish, adopt, materially amend or terminate any ANDX Employee Benefit Plan, (B) grant any new awards, or amend or modify the terms of any outstanding awards, under any ANDX Employee Benefit Plan, (C) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any ANDX Employee Benefit Plan, (D) hire any employee, other than any employee with an aggregate annual salary of less than $250,000,or (E) terminate the employment of any executive officer other than for cause; or
(xii) agree, authorize or commit to do any of the foregoing.
(c) After the date of this Agreement and prior to the Effective Time, except (i) as required by applicable Laws, (ii) as otherwise expressly permitted contemplated by this Agreement or (iii) as approved set forth in writing Section 7.1(c) of the MPLX Disclosure Letter, each of the MPLX Parties will, and agrees that it will cause its Subsidiaries to: (w) conduct its business in the ordinary course of business consistent with past practice, (x) use commercially reasonable efforts to maintain and preserve intact its business organization and the goodwill of those having business relationships with it and retain the services of its present officers and key employees, (y) use commercially reasonable efforts to comply in all material respects with all applicable Laws and the requirements of all MPLX Material Contracts, and (z) use commercially reasonable efforts to keep in full force and effect all material insurance policies maintained by ▇▇▇▇▇or on behalf of the MPLX Parties and their Subsidiaries, from other than changes to such policies made in the ordinary course of business.
(d) Without limiting the generality of Section 7.1(c), after the date hereof until of this Agreement and prior to the earlier Effective Time, except as required by applicable Laws or as otherwise expressly contemplated by this Agreement, (x) each of the Closing MPLX Parties will, and agrees that it will cause its Subsidiaries to, conduct its business in the ordinary course of business consistent with past practice and (y) each of the MPLX Parties will not, and agrees that it will cause its Subsidiaries not to, in each case without the prior written consent of the ANDX Parties (which consent will not be unreasonably withheld, delayed or conditioned):
(i) adopt or propose any change to its Governing Documents or the termination Governing Documents of its Subsidiaries as in effect on the date of this Agreement, Seller shall not take other than in immaterial respects in relation to any action which would require disclosure on Section 2.8 of their Subsidiaries;
(ii) make any change to its accounting policies or procedures, except as required by changes after the date hereof in GAAP; or
(iii) (A) change its fiscal or taxable year or any method of Tax accounting, (B) make, change or revoke any material Tax election, (C) settle or compromise any material liability for Taxes, (D) file any material amended Tax Return, (E) enter into an arrangement with any Governmental Entity with respect to Taxes; (F) surrender any right to claim a refund for Taxes, (G) consent to an extension of the Disclosure Schedule or:
statute of limitations applicable to any Tax claim or assessment, or (iH) take or omit to take any action that results would reasonably be expected to cause MPLX or may any of its Subsidiaries to be treated, for U.S. federal income Tax purposes, as a corporation.
(e) From the date of this Agreement until the Closing Date, each of the ANDX Parties and MPLX Parties shall promptly notify the other parties of (i) any event, condition or circumstance that could reasonably be expected to result in any of the representations and warranties of Seller or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein in Article VIII not being satisfied;
satisfied at the Effective Time, and (ii) amend or otherwise change the organizational documents of Seller;
(iii) (A) authorize, issue, sell or transfer any membership interests or other securities of Seller, (B) adjust, split, combine or reclassify or otherwise amend the terms of any membership interest or other security of Seller, (C) declare, authorize, set aside make or pay any dividend or other distribution (whether in cash, stock or other property) or (D) enter into any agreement with respect to the voting of any equity of Seller;
(iv) (A) merge or consolidate with any other Person, acquire any business or assets of any other Person (whether by merger, stock purchase, asset purchase or other business combination), other than the purchase of supplies in the Ordinary Course of Business or (B) form any new Subsidiary;
(v) (A) materially change the operation of the Business, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of business;
(vi) make any loans, advances or capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of Business);
(vii) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on or otherwise encumber any Assets, other than in the Ordinary Course of Business;
(ix) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur any Indebtedness or issue any debt securities or warrants or other rights to acquire debt securities of Seller or assume, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person for Indebtedness or capital obligations, in the case of any of the foregoing;
(xii) cancel any debts owed to or claims held by Seller in excess of $35,000;
(xiii) abandon, disclaim, dedicate to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreement;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;
(xv) revalue any of the assets of the Seller, except as required by GAAP, or enter into, or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contract;
(xvi) (A) change any method of accounting or accounting practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Business;
(xvii) make, revoke or change any Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date;
(xviii) modify, amend or terminate (other than pursuant to the expiration of its term other than as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty theretonotifying Party of any covenant, obligation or agreement contained in this Agreement; provided, however, that the delivery of any notice pursuant to this Section 7.1(d) any Contract currently in effect or termination release or assign any material rights or claims thereunder;
(xix) fail to pay any required maintenance or other similar fees shall not limit or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property;
(xx) commence, settle or compromise any Proceeding;
(xxi) cancel, materially reduce or fail to maintain any insurance policy;
(xxii) change or modify affect the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;
(xxiii) engage in any transaction with any Related Parties; or
(xxiv) authorize or enter into any agreement, commitment or understanding (whether written or oral) with respect remedies available hereunder to the foregoingnotified Party.
Appears in 1 contract
Sources: Merger Agreement (MPLX Lp)
Interim Operations. (a) From the date hereof of this Agreement until the earlier Closing, except as (w) approved in writing by Purchaser, (x) provided in subsections (b) through (e) of the Closing this Section 6.1 or termination of as expressly required by this Agreement, Seller (y) required by applicable Law or (z) set forth in Section 6.1 of the Company Disclosure Schedule, (A) the Company shall, and shall cause each of its Subsidiaries to, conduct their business only in the Ordinary Course of Business (and shall timely pay all Entity Level Taxes) and (B) the Company shall not, and shall not permit any of its Subsidiaries to, take any of the following actions, in each case without the prior written consent of Purchaser (such consent not to be unreasonably withheld, conditioned or delayed):
(i) operate amend any provision of its Organizational Documents;
(ii) [reserved];
(iii) merge, consolidate or effect any similar transaction with any Person other than a wholly owned member of the Business only Company Group (each such Person that is not a wholly owned member of the Company Group being called a “Non-Group Member”), or enter into any joint venture or similar transaction with any Non-Group Member;
(iv) acquire, in one or more transactions, from any Non-Group Member (A) except as set forth in Section 6.1(b)(i) of the Company Disclosure Schedule, any assets, including computers, furnitures and other equipment (other than (1) equity interests or businesses with respect to which clause (B) below shall apply, (2) CMBS and/or CDO bonds and/or whole loans (or participations therein) with respect to which Section 6.1(b)(i) shall apply and (3) loans originated by the Company’s conduit business with respect to which Section 6.1(b)(ii) shall apply) for consideration in excess of $50,000 individually or $750,000 in the aggregate, or (B) any equity interests or business for aggregate consideration in excess of $10,000,000;
(v) sell, lease, license or otherwise dispose of, to any Non-Group Member, any of its assets, including any CDO-Related Security or any CMBS or any voting, approval or other rights under any CDO-Related Security or any CMBS, other than in the Ordinary Course of Business, or sell, lease, license or otherwise dispose of, to any Non-Group Member in the Ordinary Course of Business any of its assets, including maintaining appropriate service levelsany CDO-Related Security or any CMBS or any voting, approval or other rights under any CDO-Related Security or any CMBS, for consideration in excess of $10,000,000 individually or $25,000,000 in the aggregate except as otherwise permitted by Section 6.1(b)(i) or Section 6.1(b)(ii);
(vi) enter into any line of business or offer any services of a nature substantially different from those in which a member of the Company Group is engaged or which a member of the Company Group provides as of the date of this Agreement;
(vii) issue, sell, grant, transfer or otherwise dispose of, or pledge or otherwise encumber, any limited liability company interests, shares of capital stock of, or other equity interest in the Company or any of its Subsidiaries (collectively, “Company Group Equity Interests”), or any securities convertible into, or exercisable or exchangeable for, any Company Group Equity Interests or any options, calls, warrants or other rights to acquire any Company Group Equity Interests or any such convertible, exercisable or exchangeable securities in each case to any Non-Group Member;
(viii) split, combine or reclassify, or directly or indirectly repurchase, redeem or otherwise acquire, any Company Group Equity Interests not held by a member of the Company Group;
(ix) incur, assume or guarantee any Indebtedness to any Non-Group Member in excess of $10,000,000 in the aggregate, or cancel any Indebtedness owed by any Non-Group Member in excess of $10,000,000, in the aggregate, in each case other than in the Ordinary Course of Business with respect to indebtedness of the type referenced in clauses (c) through (f) of the definition of “Indebtedness”;
(x) loan or advance any amount to any Person;
(xi) cancel or waive all or any part of any Indebtedness owed to the Company or any of its Subsidiaries by any Seller or any of such Seller’s respective Affiliates (other than the Company and its Subsidiaries);
(xii) settle, compromise, discharge, waive, release or assign any material claim, right or Legal Proceeding, except where only monetary damages are owed by the Company or any of its Subsidiaries and there is no post-Closing obligation or cost to the Company or any of its Subsidiaries (other than covenants customary in settlement agreements that are of immaterial nature and scope);
(xiii) pay, assume, indemnify or incur any Indebtedness for the benefit of the Sellers or any of the Sellers’ Affiliates (other than the Company and its Subsidiaries), other than any payments required to be made pursuant to the terms of existing Indebtedness or Indebtedness incurred after the date of this Agreement pursuant to and in compliance accordance with applicable Law including the terms of this Agreement;
(xiv) make any COVID-19 Measures; and material changes with respect to its accounting policies, practices or procedures except as required by GAAP;
(xv) terminate, or waive any material right or benefit under, any Material Contract or (ii) use commercially reasonable efforts other than in the Ordinary Course of Business, enter into, amend, renew or extend, or grant any consent under, any Material Contract;
(xvi) make or change any material election in respect of Taxes, adopt or change any material accounting method in respect of Taxes or otherwise, enter into any closing agreement, settle any claim or assessment in respect of a material amount of Taxes, request any ruling (other than the ruling requested on September 26, 2012) or similar guidance with respect to Taxes or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes, except as required by Law or GAAP;
(xvii) other than as may be required by the terms of any Benefit Plan in existence on the date of this Agreement or as set forth on Section 6.1(a)(xvii) of the Company Disclosure Schedule, (A) maintain and preserve intact terminate, enter into, or amend any Benefit Plan, or any plan, program, arrangement, practice or agreement that would be a Benefit Plan if it were in existence on the business organization and goodwill of date hereof, except to the Business, the Assets and the Assumed Liabilitiesextent that such amendment would not materially increase benefits or result in materially increased administrative costs, (B) maintain satisfactory relationships with Seller’s clientsincrease the compensation of any Business Employees, operatorsofficers or directors of the Company or any of its Subsidiaries, distributors, customers, insurance underwriters and other third parties having business dealings with Seller, except for increases in base salaries in the Ordinary Course of Business or (C) pay grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan; provided, however, that the foregoing clauses (A)-(C) shall not restrict the Company or any of its debts and Taxes when due (subject Subsidiaries from entering into or making available to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay newly hired or performpromoted employees, in all material respectseach case in the Ordinary Course of Business, other obligations when dueplans, (D) maintain agreements, benefits and compensation arrangements that have a value that is consistent with the past practice of making compensation and benefits available to newly hired or promoted employees in effect all Permits and (E) maintain good relations with, and keep available the services of, the Business Employees.similar positions;
(bxviii) Without limiting terminate the generality employment of (other than by the Company or its Subsidiaries for cause and in consultation with Purchaser) or hire any Person whose annual base compensation exceeded or is reasonably expected to exceed $250,000;
(xix) adopt, enter into, terminate, amend, extend or renew any collective bargaining agreement, works council agreement or other labor union or employee representative Contract;
(xx) agree to any restriction on the Company’s or any Subsidiary’s exercise of any of its rights under any CDO-Related Security, or agree to any modification, waiver or amendment of any agreement or instrument governing or relating to any CDO-Related Security, including any collateral management or similar Contract;
(xxi) agree to any restriction on the Company’s or any Subsidiary’s exercise of any of its rights under any CMBS, or agree to any modification, waiver or amendment of any Contract governing or relating to any CMBS, including any servicing or similar Contract;
(xxii) enter into any modification, waiver or consent of any Contract that would limit any right of the foregoingCompany or any Subsidiary of the Company in any capacity to appoint (or approve or be consulted with respect to the appointment of) the primary servicer, except master servicer or special servicer for any loan;
(xxiii) effect or cause the resignation of the Company or any Subsidiary of the Company from its capacity as primary servicer, master servicer or special servicer in connection with any one or more loans or interests therein, or from its capacity as collateral manager, disposition consultant, administrator, investment manager or asset manager or in a similar capacity with respect to any one or more securities secured by or evidencing an interest in (in each case, whether directly or indirectly and whether in whole or in part) by one or more loans or interests therein;
(xxiv) terminate or allow coverage to lapse under any of the insurance policies set forth in Section 5.1(b) 3.21 of the Disclosure Schedule, as expressly permitted by this Agreement or as approved in writing by ▇▇▇▇▇, from the date hereof until the earlier of the Closing or the termination of this Agreement, Seller shall not take any action which would require disclosure on Section 2.8 of the Company Disclosure Schedule or:
(i) take or omit to take any action that results or may reasonably be expected to result without obtaining replacements therefor in any the Ordinary Course of the representations and warranties of Seller or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfiedBusiness;
(ii) amend or otherwise change the organizational documents of Seller;
(iii) (A) authorize, issue, sell or transfer any membership interests or other securities of Seller, (B) adjust, split, combine or reclassify or otherwise amend the terms of any membership interest or other security of Seller, (C) declare, authorize, set aside make or pay any dividend or other distribution (whether in cash, stock or other property) or (Dxxv) enter into any agreement with respect Contract that would have been required to be set forth on Section 3.7(a)(v) of the voting of any equity of SellerCompany Disclosure Schedule if such Contract had been in effect on the date hereof;
(ivxxvi) subject to Section 6.1(b), (A) merge enter into any lease of real property in the capacity as lessee or consolidate with any other Person, acquire any business sub-lessee (or assets of any other Person (whether by merger, stock purchase, asset purchase or other business combinationin a similar capacity), other than the purchase except any renewals of supplies existing leases in the Ordinary Course of Business or (B) form purchase any new Subsidiary;
direct or indirect interest in any real property (v) (A) materially change the operation of the Business, Assets or the Assumed Liabilities or other than any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be purchases required to comply with any Law or be consummated pursuant to the terms of Contracts in existence on the date of this Agreement or (BAgreement, all of which are described on Section 6.1(a)(xxvi) enter into a new line of business or abandon or discontinue an existing line of business;the Company Disclosure Schedule); or
(vixxvii) make authorize, agree or commit to do any loansof the foregoing; provided, advances or capital contributions however, that the Company shall, and shall cause each of its Subsidiaries to, or investments in, use reasonable best efforts to keep Purchaser reasonably informed of any Person action (other than advances in respect of expenses to Business Employees actions not material in value and nature and taken in the Ordinary Course of Business);) taken by the Company or any of its Subsidiaries that would require the prior written consent of Purchaser pursuant to this Section 6.1 but for the fact that such action did not meet or exceed a threshold set forth in this Section 6.1.
(viib) (A) institute or announce any increase Notwithstanding anything to the contrary in the compensation, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);Section 6.1(a):
(viiii) transferFrom the date of this Agreement through the Closing, lease, license, guarantee, sell, mortgage, pledge, dispose the Company and its Subsidiaries shall have the right to acquire (x) CMBS and/or CDO bonds and/or whole loans (or participations therein) in respect of the transactions set forth on Section 6.1 of the Company Disclosure Schedule and (y) in one or incur any Lien on or otherwise encumber any Assets, other than more transactions in the Ordinary Course of Business;
, from one or more Non-Group Members, up to $25,000,000 (ixbased on consideration paid) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
aggregate of CMBS and/or CDO bonds and/or whole loans (xor participations therein) agree toso long as no individual purchase, request or adopt series of related purchases, exceeds $10,000,000 (A) any moratorium or suspension of payment of any Indebtedness, based on consideration paid); provided that (B1) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (Crestrictions in Section 6.1(a)(v) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur any Indebtedness or issue any debt securities or warrants or other rights to acquire debt securities of Seller or assume, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person for Indebtedness or capital obligations, in the case of any of the foregoing;
(xii) cancel any debts owed to or claims held by Seller in excess of $35,000;
(xiii) abandon, disclaim, dedicate shall not apply to the public, sell, assign sale of CMBS and/or CDO bonds and/or whole loans (or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreement;
(xivparticipations therein) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;
(xv) revalue any of the assets of the Seller, except as required by GAAP, or enter into, or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contract;
(xvi) (A) change any method of accounting or accounting practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Business;Business by the Company or any of its Subsidiaries to the extent the consideration received from such sales is used to fund the purchase of CMBS and/or CDO bonds and/or whole loans (or participations therein) pursuant to this clause (i) and (2) the consideration received from such sales of CMBS and/or CDO bonds and/or whole loans (or participations therein) shall be credited towards the $25,000,000 threshold (such that, for example, any such sales for $10,000,000 in total consideration provide an additional $10,000,000 in permitted acquisitions of such CMBS, CDO bonds and whole loans); provided, further, that if Purchaser consents in writing (which the parties agree may be granted by electronic mail from an authorized representative of Purchaser) to any acquisitions of CMBS and/or CDO bonds and/or whole loans (or participations therein) referenced in this clause (i), the aggregate consideration paid in respect of such acquisitions shall not be applied against the thresholds stated herein. From the date hereof to the Closing, the Company agrees to report to Purchaser on a weekly basis as to all actions taken in respect of this clause (i).
(xviiii) makeFrom the date of this Agreement through the Closing, revoke the Company and its Subsidiaries shall have the right to originate loans in the Ordinary Course of Business in connection with the Company’s conduit business in amounts that do not, individually or change in the aggregate, result in an equity investment by the Company or its Subsidiaries in such loans of more than $50,000,000, in the aggregate; provided that the Company and its Subsidiaries shall also have the right to incur, pursuant to the existing repurchase facilities of the Company and its Subsidiaries (to the extent permitted thereunder), for purposes of such origination indebtedness equal to 75% of the loan to value ratio (as determined in accordance with the existing repurchase facilities of the Company and its Subsidiaries); provided, further, that (1) the restrictions in Section 6.1(a)(v) shall not apply to the sale of loans originated in the Ordinary Course of Business in connection with the Company’s conduit business to the extent the consideration received from such sales is used to fund the origination of loans pursuant to this clause (ii) and (2) (x) if the Company or any Tax election by Seller of its Subsidiaries sells any such loans to a Non-Group Member the $50,000,000 threshold shall calculated without regard to such loan origination except that could adversely impact the amount of Taxes due gain or payable (loss realized by the Company and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date;
(xviii) modify, amend or terminate (other than pursuant to the expiration of its term other than Subsidiaries as a result of such sale shall be applied as a credit or deduct, as applicable, to such threshold and (y) if Purchaser consents in writing (which the parties agree may be granted by electronic mail from an authorized representative of Purchaser) to any action loan origination referenced in this clause (ii), such originations shall not be applied against the threshold (provided that, notwithstanding this clause (y), in no event shall the Company and its Subsidiaries have loans outstanding that were originated in connection with the Company’s conduit business after the date of this Agreement that, individually or in the aggregate, result in an equity investment by the Company or its Subsidiaries in such loans of more than $75,000,000). Notwithstanding the foregoing, all references to $50,000,000 in this clause (ii) shall instead refer to $25,000,000 until the Company consummates the GSMC 2013-GC10 securitization transaction.
(iii) From the date of this Agreement through the Closing, except (1) for Permitted Activities, (2) as required by applicable Law or (3) as described in Section 6.1(c), the Company shall not, and shall not permit any of its Subsidiaries or any of its Affiliates which it Controls to, in each case without the prior written consent of Purchaser (such consent not to be unreasonably withheld, conditioned or delayed, and which the parties agree may be granted by electronic mail from an authorized representative of Purchaser) take or cause to be taken by Sellerany action, or other than as a result of a material breach by the counterparty thereto) exercise any Contract currently in effect power or termination release or assign any material rights or claims thereunder;
(xix) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandonauthority, let lapse or fail to protect take any Owned Intellectual Property;
(xx) commence, settle or compromise any Proceeding;
(xxi) cancel, materially reduce or fail to maintain any insurance policy;
(xxii) change or modify the Seller’s credit, collectionaction required of it under applicable Law, or payment policiesany existing Contract, procedures permit, license, or practicesauthorization, or take or permit to occur any Specified Restricted Activity, in respect of any of the commercial properties identified in Exhibit O-1 (collectively, the “Commercial Properties” and each individually a “Commercial Property”). Without limiting anything contained in this clause (iii), the Company shall, and shall cause its Subsidiaries and Affiliates which it Controls to, consult with Purchaser with respect the Commercial Properties (including acceleration of collections or receivables regarding (whether or not past duex) in the management, maintenance, development, construction, operation, and remediation thereof, (y) any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;
(xxiii) engage in any transaction substantive communications with any Related Parties; or
Governmental Authority and (xxivz) authorize any offers or enter into solicitations regarding any agreementCommercial Property), commitment or understanding on a weekly basis (whether written or oral) and, with respect to the foregoing.material issues with respect to a Commercial Property,
Appears in 1 contract
Sources: Unit Purchase Agreement (Starwood Property Trust, Inc.)
Interim Operations. (a) From Except (i) as set forth in Section 6.1(a) of the Company Disclosure Letter, (ii) as expressly contemplated or permitted by this Agreement, (iii) as may be required to comply with applicable Law or any Order or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned, it being agreed by Parent that its consent shall be deemed to have been given if Parent does not object in writing to a written request for such consent within five Business Days after such request for consent is delivered by the Company), during the period from the date hereof of this Agreement until the earlier of the Closing or Effective Time and the date of termination of this AgreementAgreement in accordance with Section 9.1, Seller the Company shall, and shall (i) operate the Business only cause each of its Subsidiaries to, conduct its respective business in all material respects in the Ordinary Course of Business, including maintaining appropriate service levels, ordinary course consistent with past practice and in compliance with applicable Law including any COVID-19 Measures; and (ii) that it shall use its commercially reasonable efforts to (A) maintain and preserve intact the business organization and goodwill of the Businessits current relationship with its suppliers, the Assets and the Assumed Liabilities, (B) maintain satisfactory relationships with Seller’s clients, operatorsmanufacturers, distributors, customers, insurance underwriters business associates, executives and other third parties having business dealings with Seller, (C) pay its debts key employees and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services of, the Business EmployeesGovernmental Entities.
(b) Without limiting the generality of the foregoing, except Except (i) as set forth in Section 5.1(b6.1(b) of the Company Disclosure ScheduleLetter, (ii) as expressly contemplated or permitted by this Agreement Agreement, (iii) as may be required to comply with applicable Law or as approved any Order, or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned, it being agreed by Parent that its consent shall be deemed to have been given if Parent does not object in writing to a written request for such consent within five Business Days after such request for consent is delivered by ▇▇▇▇▇the Company), during the period from the date hereof of this Agreement until the earlier of the Closing or Effective Time and the date of termination of this AgreementAgreement in accordance with Section 9.1, Seller the Company shall not, and shall not take permit any action which would require disclosure on Section 2.8 of the Disclosure Schedule orits Subsidiaries to:
(i) take (A) adjust, split, combine, or omit to take any action that results reclassify its capital stock or may reasonably be expected to result in the capital stock of any of its Subsidiaries; (B) declare, authorize or pay any dividend or make any other distribution in respect of the representations and warranties shares of Seller its capital stock or any securities or obligations convertible into or exchangeable for any shares of its capital stock (except for any dividend or other distribution by a wholly owned Subsidiary of the Beneficial Owners set forth herein being Company to the Company or becoming untrue another wholly owned Subsidiary of the Company); (C) directly or indirectly redeem, purchase or otherwise acquire any shares of its capital stock or any securities or obligations convertible into or exchangeable for any shares of its capital stock (except for the acquisition of Company Common Stock (1) tendered by employees or former employees in any material respect connection with a cashless exercise of Company Options or in order to pay taxes with respect to equity-based awards, or for the Company to satisfy withholding obligations in respect of such taxes, in connection with Company Options or other equity-based awards) or (2) in connection with the forfeiture of equity-based awards granted pursuant to the Company Equity Plans); or (D) except for transactions solely between the Company and its Subsidiaries, or between Subsidiaries of the Company, issue, deliver, sell, pledge, dispose of, grant, award or encumber any shares of capital stock, ownership interests or voting securities, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stock, any other ownership interests or any voting securities (including restricted stock units, stock appreciation rights, phantom stock or similar instruments), of the Company or any of its Subsidiaries (except for issuances (1) of shares of Company Common Stock upon the conditions set forth herein not being satisfiedexercise or settlement of Company Options, options under the Company ESPP or other equity-based awards, in each case, that are outstanding as of the date hereof; (2) pursuant to the Rights Plan, (3) required to be made by virtue of the consummation of the Merger; or (4) required to be made pursuant to this Agreement);
(ii) amend sell, transfer, mortgage, encumber, dispose of or otherwise change subject to any Lien (other than a Permitted Lien) any of its material assets or material properties (other than to a wholly owned Subsidiary), by merger, consolidation, asset sale or other business combination (including formation of a joint venture) or cancel, release or assign any material Indebtedness or claim, or restructure, reorganize or completely or partially liquidate, in each case, except (A) in the organizational documents ordinary course of Sellerbusiness consistent with past practice (which for the avoidance of doubt and without limitation of the foregoing shall be deemed to include the sale or other disposition of supply, inventory or trading stock in the ordinary course of business), (B) dispositions of obsolete or worthless assets, (C) sales of receivables and other assets in the ordinary course of business consistent with past practice, (D) sales of immaterial assets for a purchase price of $10,000,000 or less in any single case or $25,000,000 in the aggregate; and (E) leases and subleases of real property owned by the Company or any Company Subsidiary and leases of real property under which the Company or any Company Subsidiary is a tenant or a subtenant and voluntary terminations or surrenders of such leases;
(iii) (A) authorizemake any acquisition, issue, sell or transfer any membership interests by purchase or other securities acquisition of Seller, (B) adjust, split, combine or reclassify or otherwise amend the terms of any membership interest or other security of Seller, (C) declare, authorize, set aside make or pay any dividend or other distribution (whether in cash, stock or other property) or (D) enter into any agreement with respect to the voting of any equity of Seller;
(iv) (A) merge or consolidate with any other Personinterests, acquire any business or assets of any other Person (whether by merger, stock purchaseconsolidation, asset purchase or other business combination), or by contributions to capital, or make any material purchases of any property or assets (including material Intellectual Property) in or from any other Person other than a wholly owned Subsidiary of the purchase of supplies in the Ordinary Course of Business Company, or (B) form make any new Subsidiary;
(v) loan to any Person, except (A) materially change the operation of the Business, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be expressly required to comply with any Law or by the terms of any Contract in force on the date of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of business;
(vi) make any loans, advances or capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of Business);
(vii) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business EmployeesAgreement, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, as otherwise permitted by this Section 6.1(b); (C) grant any severance for portfolio acquisitions or termination pay (cash, equity or otherwise) to any Business Employee, Intellectual Property licensing in the ordinary course of business consistent with past practice; (D) for foreclosures or acquisitions of control in a fiduciary, agent or similar capacity or in satisfaction of debts previously contracted in good faith or pursuant to written contracts or agreements entered into prior to the date hereof; and (E) other acquisitions in the ordinary course of business consistent with past practice and, in any case, involving consideration in an aggregate amount not in excess of $25,000,000;
(iv) enter into, adoptrenew, amend extend, amend, waive any material rights under or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on or otherwise encumber any Assets, other than in the Ordinary Course of Business;
(ix) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur any Indebtedness or issue any debt securities or warrants or other rights to acquire debt securities of Seller or assume, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person for Indebtedness or capital obligations, in the case of any of the foregoing;
(xii) cancel any debts owed to or claims held by Seller in excess of $35,000;
(xiii) abandon, disclaim, dedicate to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreement;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;
(xv) revalue any of the assets of the Seller, except as required by GAAP, or enter into, or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contract, in each case other than in the ordinary course of business;
(xviv) other than as required by any Contract in effect on the date hereof (including, without limitation, this Agreement and the Company Benefit Plans) or applicable Law, (A) change increase, or commit to increase, the salary, wages, benefits, bonuses or other compensation or severance payable to any method of accounting its current or accounting practiceformer directors, officers or other employees, other than changes required under applicable Law salary or GAAP or wage increases made in the ordinary course of business, consistent with past practice, to employees who receive annual compensation of less than $250,000, (B) fail amend, establish, enter into or terminate any Company Benefit Plan (or arrangement that would be a Company Benefit Plan if in existence on the date hereof) or collective bargaining or similar agreement other than amendments to maintain the Seller’s booksCompany health and welfare plans that are not material, accounts and records in (C) accelerate the Ordinary Course vesting of Businessany stock options or other stock-based compensation or (D) hire any director or employee with annual base compensation of $200,000 or more;
(xviivi) makeamend the Company Charter or Company By-Laws or amend in any material respect the certificate of organization, revoke by-laws or any other organizational documents of any Company Subsidiary;
(vii) incur any Indebtedness for borrowed money, issue any debt securities or assume, guarantee or endorse or otherwise become responsible for the obligations of another Person, except, in each case, (A) intercompany guarantees or intercompany “keep well” or other agreements to maintain any financial statement condition of the Company or any Company Subsidiary, (B) letters of credit issued in the ordinary course of business, (C) Indebtedness incurred through the revolving credit facility under the Credit Agreement (including in respect of letters of credit), (D) Indebtedness having an aggregate principal amount outstanding that is not in excess of $5,000,000 and (E) in the ordinary course of business consistent with past practice, provided that, in the case of clauses (D) and (E), such Indebtedness shall be prepayable without any premium, penalty or similar cost;
(viii) except in the ordinary course of business, make or change any material Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date;
(xviii) modify, amend or terminate (other than pursuant to the expiration of its term other than as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunder;
(xix) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property;
(xx) commenceelection, settle or compromise any Proceedingmaterial Tax liability of the Company or any of its Subsidiaries, file any material amendment to an income or other material Tax Return, or waive any statute of limitations in respect of Taxes except as required by Law;
(xxiix) cancelmake any material changes in its accounting methods or method of Tax accounting, materially reduce practices or fail policies, except as may be required under GAAP (or any interpretation thereof), including pursuant to maintain standards, guidelines and interpretations of the Financial Accounting Standards Board or any insurance policysimilar organization;
(xxiix) change enter into, renew or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) amend in any material respect any transaction, Contract, arrangement or fail understanding between the Company or any Subsidiaries, on the one hand, and any Affiliate of the Company (other than any of the Company’s Subsidiaries), on the other hand, of the type that would be required to pay or delay payment be disclosed under Item 404 of payables or other Liabilities in any material respectRegulation S-K promulgated under the Exchange Act;
(xxiiixi) engage make or authorize capital expenditures except (A) as budgeted in any transaction the Company’s current plan approved by the Company Board that was made available to Parent prior to the date hereof, (B) in the ordinary course of business consistent with any Related Partiespast practice or (C) otherwise in an amount not to exceed $3 million; or
(xxivxii) authorize agree to, or enter into make any agreementcommitment to, commitment or understanding (whether written or oral) with respect to take any of the foregoingactions prohibited by this Section 6.1(b).
Appears in 1 contract
Sources: Merger Agreement (Par Pharmaceutical Companies, Inc.)
Interim Operations. (a) From During the period from the date hereof until the earlier of the Closing or termination of this Agreement, Seller shall (i) operate Agreement ------------------ to the Business only in the Ordinary Course of Business, including maintaining appropriate service levels, and in compliance with applicable Law including any COVID-19 Measures; and (ii) use commercially reasonable efforts to (A) maintain and preserve intact the business organization and goodwill of the Business, the Assets and the Assumed Liabilities, (B) maintain satisfactory relationships with Seller’s clients, operators, distributors, customers, insurance underwriters and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services of, the Business Employees.
(b) Without limiting the generality of the foregoingEffective Time, except as set forth in Section 5.1(b) of the Disclosure Schedule, as expressly permitted specifically contemplated by this Agreement (including Section 3.02) or otherwise as consented to or approved in writing by ▇▇▇▇▇the Purchaser, from the date hereof until Seller shall cause the earlier Company and the Subsidiaries to adhere to each of the Closing or following:
(a) the termination Business shall be conducted only in, and the Company and each of this Agreement, Seller the Subsidiaries shall not take any action which would require disclosure on Section 2.8 except in, the ordinary and usual course of the Disclosure Schedule or:Business consistent with past practice;
(ib) take or omit to take any action that results or may reasonably be expected to result in neither the Company nor any of the representations and warranties Subsidiaries shall make or propose any change or amendment to its respective certificate of Seller incorporation, other charter document, by-laws or operating agreement, as applicable;
(c) neither the Beneficial Owners set forth herein being or becoming untrue in any material respect or in Company nor any of the conditions set forth herein not being satisfied;
(ii) amend Subsidiaries shall issue or otherwise change sell, or authorize the organizational documents issuance or sale of, any shares of Seller;
(iii) (A) authorize, issue, sell its capital stock or transfer any membership interests or of its other securities or issue any securities convertible into or exchangeable for, or options, warrants to purchase, scrip, rights to subscribe for, calls or commitments of Sellerany character whatsoever relating to, (B) or enter into any contract, understanding or arrangement with respect to the issuance of, any shares of its capital stock or any of its other securities, or enter into any arrangement or contract with respect to the purchase or voting of shares of its capital stock or adjust, split, combine or reclassify any of its securities, or otherwise amend make any other changes in its capital structure;
(d) except as permitted in Section 3.02, the terms Company and the Subsidiaries shall not undertake any of the actions specified in Section 2.02(i);
(e) the Company shall, and shall cause the Subsidiaries to, use all reasonable efforts to preserve intact the business organization of the Company and each of the Subsidiaries, to keep available the services of its and their present officers and key Employees, and to preserve the goodwill of those having business relationships with it and the Subsidiaries;
(f) neither the Company nor any membership interest or other security of Seller, (C) declare, authorize, set aside make or pay the Subsidiaries shall take any dividend or other distribution (whether in cash, stock or other property) or (D) enter into any agreement action with respect to the voting grant of any equity of Seller;
(iv) (A) merge or consolidate with any other Person, acquire any business or assets of any other Person (whether by merger, stock purchase, asset purchase or other business combination), other than the purchase of supplies in the Ordinary Course of Business or (B) form any new Subsidiary;
(v) (A) materially change the operation of the Business, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of business;
(vi) make any loans, advances or capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of Business);
(vii) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity otherwise than pursuant to written Plans of the Company or otherwiseany of the Subsidiaries in effect on the date hereof) or with respect to any increase of benefits payable under its written Plans providing for severance or termination pay in effect on the date hereof;
(g) neither the Company nor any of the Subsidiaries shall (except as required by law and except for salary increases or other employee benefit arrangements in the ordinary course of the Business Employee, (Dconsistent with past practice that do not result in a material increase in benefits or compensation expense to the Company or any Subsidiary or pursuant to collective bargaining agreements as presently in effect) enter into, adopt, adopt or amend any Plan or terminate other arrangement for the benefit or welfare of any Employee Benefit or increase in any manner the compensation or fringe benefits of any Employee or pay or grant any benefit not required by any existing Plan or arrangement; provided, however, that the Company and the Subsidiaries shall have ----------------- the right to change the terms of any such Plan or arrangement pertaining to transaction incentive bonuses, to the extent that such change does not result in any cost increase to the Purchaser, the Company or the Subsidiaries;
(Eh) hire except with respect to transactions between and among the Company and any Business Employee of the Subsidiaries or terminate or transfer the endorsement of negotiable instruments in the ordinary course of the Business, neither the Company nor any Business Employee of the Subsidiaries shall guarantee any Indebtedness (other than for cause)any guaranty of Subsidiary Indebtedness in the ordinary course of the Business) or the obligations of any Person;
(viiii) transferexcept in the ordinary course of the Business consistent with past practice or in the case of obsolete or redundant assets, leaseor those requiring replacement, licenseand except as disclosed on Schedule 2.02(i), guaranteethe Company shall not, ---------------- and shall not permit any Subsidiary to, sell, mortgage, pledge, lease or otherwise dispose of any of its assets or incur any Lien on or otherwise encumber any Assets, other than in the Ordinary Course of Business;
(ix) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability Company's or any Subsidiary's interest in any of Seller to pay its debts as they become dueassets, or (D) enter into any other thing under any applicable Law relating agreements to bankruptcy or insolvency with similar effect as do any of the foregoing (A) through (Cincluding any agreement to sell, lease, occupy or use by easement or otherwise any part of the Real Property);
(xij) incur the Company shall not, and shall not permit any Indebtedness or issue any debt securities or warrants Subsidiary to, acquire (for cash, shares of stock or other rights consideration) (including by merger, consolidation or acquisition of stock or assets) any Person or any division or assets thereof;
(k) the Company shall not, and shall not permit any Subsidiary to, authorize, recommend, propose or announce an intention to acquire debt securities adopt a plan of complete or partial liquidation or dissolution of the Company or any of the Subsidiaries;
(l) the Company shall not, and shall not permit any Subsidiary to, make any material Tax elections or settle or compromise any material Liability for Taxes;
(m) other than in the ordinary course of the Business consistent with past practice and other than the discharge of any Liabilities of the Company by the Seller or assume, guarantee or endorse, as an accommodation or otherwisecontemplated by Exhibit D, the obligations Company shall not, and shall not --------- permit any Subsidiary to, waive any material rights or make any payment, direct or indirect, of any Person for Indebtedness material Liability of the Company or capital obligationsany of the Subsidiaries before the same comes due in accordance with its terms;
(n) the Company shall not, and shall not permit any Subsidiary to, fail to maintain its existing insurance coverage in effect or, in the case of event any of such coverage shall be terminated or lapse, to the foregoingextent available at reasonable cost, procure substantially similar substitute insurance policies which in all material respects are in at least such amounts and against such risks as are currently covered by such policies;
(xiio) cancel the Company shall not, and shall not permit any debts owed to Subsidiary to, enter into any collective bargaining agreement or claims held by Seller in excess of $35,000any successor collective bargaining agreement;
(xiiip) abandonthe Company shall not, disclaimand shall not permit any Subsidiary to, dedicate to enter into any long term purchase or sales agreement or other similar arrangement (other than the public, sell, assign or grant renewal of any security interest in, to or under any Business Intellectual Property or Business IP Agreementsales agreements in effect as of the date hereof);
(xivq) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Personthe Company shall not, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;
(xv) revalue any of the assets of the Seller, except as required by GAAP, or enter into, or shall not permit any of the assets of the Seller to become bound by Subsidiary to, enter into any Contract that is or would constitute Derivative Contracts having a Material Contract;
(xvi) (A) change any method of accounting or accounting practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Business;
(xvii) make, revoke or change any Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after term which extends beyond the Closing Date;
(xviiir) modify, amend the Company shall not make or terminate (other than pursuant commit to any capital expenditures in excess of the expiration Company's capital budget for calendar year 2000 nor in excess of the Company's capital budget for calendar year 2001 when approved by its term other than as a result Board of any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunder;Directors; and
(xixs) fail to pay the Company shall not, and shall not permit any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandonSubsidiary to, let lapse or fail to protect any Owned Intellectual Property;
(xx) commence, settle or compromise any Proceeding;
(xxi) cancel, materially reduce or fail to maintain any insurance policy;
(xxii) change or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;
(xxiii) engage in any transaction with any Related Parties; or
(xxiv) authorize or enter into any contract, agreement, commitment or understanding (whether written or oral) with respect arrangement to do any of the foregoing.
Appears in 1 contract
Interim Operations. (a) From The Company shall, and shall cause each of its Subsidiaries to, from and after the date hereof of this Agreement until the earlier of the Closing or Effective Time and the termination of this Agreement pursuant to Article IX (unless Parent shall otherwise approve in writing (such approval not to be unreasonably withheld, conditioned or delayed), and except as otherwise expressly required by this Agreement or as required by a Governmental Entity or applicable Law and any Material Contract in effect prior to the date of this Agreement), Seller shall (i) operate the Business only conduct its business in the Ordinary Course of BusinessBusiness and, including maintaining appropriate service levelsto the extent consistent therewith, shall use and in compliance with applicable Law including any COVID-19 Measures; and (ii) cause each of its Subsidiaries to use their respective commercially reasonable efforts to (A) maintain its and preserve intact the business organization its Subsidiaries’ relations and goodwill of the Businesswith Governmental Entities, the Assets and the Assumed Liabilitiescustomers, (B) maintain satisfactory relationships with Seller’s clientssuppliers, operatorslicensors, licensees, distributors, customerscreditors, insurance underwriters lessors, employees, agents and business associates; provided that, during any period of full or partial suspension of operations in response to COVID-19 or any COVID-19 Measures, the Company or any of its Subsidiaries may, in response to COVID-19 or any COVID-19 Measures, take such actions as are reasonably necessary (x) to protect the health and safety of the Company’s or its Subsidiaries’ employees and other third parties individuals having business dealings with Sellerthe Company or any of its Subsidiaries or (y) to respond to third-party supply or service disruptions caused by COVID-19 or any COVID-19 Measures, in each case of clause (Cx) pay its debts and Taxes when due (y), subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available reasonable prior consultation with Parent to the services of, the Business Employees.
(b) extent reasonably practicable. Without limiting the generality of and in furtherance of the foregoingforegoing sentence, from the date of this Agreement until the earlier of the Effective Time and the termination of this Agreement pursuant to Article IX, except as set forth in Section 5.1(b) of the Disclosure Scheduleotherwise expressly required by this Agreement, as expressly permitted required by this Agreement a Governmental Entity or applicable Law, as approved in writing by ▇▇▇▇▇Parent (such approval not to be unreasonably conditioned, from withheld or delayed) or set forth in the date hereof until the earlier corresponding subsection of Section 7.1(a) of the Closing or Company Disclosure Schedule, the termination of this Agreement, Seller Company shall not take any action which would require disclosure on Section 2.8 of the Disclosure Schedule orand shall cause its Subsidiaries not to:
(i) take adopt or omit to take propose any action that results or may reasonably be expected to result change in any of the representations and warranties of Seller or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfiedits Organizational Documents;
(ii) amend or otherwise change the organizational documents of Seller;
(iii) (A) authorize, issue, sell or transfer any membership interests or other securities of Seller, (B) adjust, split, combine or reclassify or otherwise amend the terms of any membership interest or other security of Seller, (C) declare, authorize, set aside make or pay any dividend or other distribution (whether in cash, stock or other property) or (D) enter into any agreement with respect to the voting of any equity of Seller;
(iv) (A) merge or consolidate with any other Person, acquire except for any business such transactions solely among Wholly Owned Subsidiaries of the Company, or assets of restructure, reorganize or completely or partially liquidate or otherwise enter into any other Person agreements or arrangements imposing material changes or restrictions on its properties, assets, operations or businesses;
(whether iii) acquire, directly or indirectly by merger, consolidation, acquisition of stock purchaseor assets or otherwise, asset purchase any business, Person, properties or other business combination)assets, other than acquisitions of inventory or other goods in the purchase Ordinary Course of supplies Business;
(iv) transfer, sell, license, lease, divest, cancel or otherwise dispose of, or incur, permit or suffer to exist the creation of any Encumbrance (other than any Permitted Encumbrance) upon, any properties or assets (tangible or intangible, including any Intellectual Property Rights), product lines or businesses of the Company or any of its Subsidiaries, including capital stock or other equity interests of any of its Subsidiaries, except in connection with (A) sales of obsolete assets, (B) nonexclusive licenses granted by the Company or its Subsidiaries with respect to Intellectual Property Rights in the Ordinary Course of Business and (C) sales of inventory or (B) form any new Subsidiaryother goods in the Ordinary Course of Business;
(v) issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber, or otherwise enter into any Contract or other agreement, understanding or arrangement (whether oral or written) with respect to the voting of, any shares of capital stock of the Company (including, for the avoidance of doubt, Shares) or capital stock or other equity interests of any of its Subsidiaries, securities convertible or exchangeable into or exercisable for any such shares of capital stock or other equity interests, or any options, warrants or other rights of any kind to acquire any such shares of capital stock, other equity interests or such convertible or exchangeable securities (other than (A) materially change the operation proxies or voting agreements solicited by or on behalf of the Business, Assets or Company in connection with the Assumed Liabilities or any method Company’s annual meeting of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement stockholders or (B) enter into the issuance of shares of such capital stock, other equity securities or convertible or exchangeable securities (1) by a new line Wholly Owned Subsidiary of business the Company to the Company or abandon another Wholly Owned Subsidiary of the Company or discontinue an existing line (2) in respect of businessCompany Equity Awards outstanding as of the date of this Agreement in accordance with their terms and, as applicable, the Stock Plans in effect on the Capitalization Date);
(vi) make any loans, advances advances, guarantees or capital contributions to, to or investments in, in any Person (other than to or from the Company and any of its Wholly Owned Subsidiaries) and for loans or advances made to directors, officers and other employees of expenses to Business Employees the Company and its Subsidiaries (x) for business-related travel, other business-related expenses, in each case, in the Ordinary Course of Business)Business or (y) pursuant to the indemnification and advancement rights of such Persons in effect as of the date of this Agreement under any agreement between or among such Person and the Company or any Subsidiary thereof, correct and complete copies of which have been made available to Parent, or the Organizational Documents of the Company or any Subsidiary thereof;
(vii) (A) institute declare, set aside, make or announce pay any increase in the compensation, bonuses dividend or other benefits distribution, payable in cash, stock, property or otherwise, with respect to any Business Employeesof its capital stock or other equity interests (including with respect to the Company, (B) enter intofor the avoidance of doubt, amend Shares), except for dividends paid by any Wholly Owned Subsidiary to the Company or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, other Wholly Owned Subsidiary of the Company and for regular quarterly dividends declared and paid at such times and in such amounts as is consistent with historical practice over the twelve-month period prior to the date of this Agreement (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for causebut under no circumstances in an amount that exceeds $0.175 per Share per calendar quarter);
(viii) transferreclassify, leasesplit, licensecombine, guaranteesubdivide or redeem, sellpurchase or otherwise acquire or offer to redeem, mortgagepurchase or otherwise acquire, pledgedirectly or indirectly, dispose any of its capital stock, other equity interests or securities convertible or exchangeable into or exercisable for any shares of its capital stock or other equity interests (including with respect to the Company, for the avoidance of doubt, Shares);
(ix) incur any Lien Indebtedness (including the issuance of any debt securities, warrants or other rights to acquire any debt security), except for Indebtedness in replacement of existing Indebtedness for borrowed money on terms substantially consistent with or otherwise encumber more favorable to the Company than the Indebtedness being replaced;
(x) make or authorize any Assetspayment of, or accrual or commitment for, capital expenditures in excess of $250,000 in the aggregate, except to the extent set forth in the Company’s capital budget set forth in Section 7.1(a)(x) of the Company Disclosure Schedule;
(xi) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement, other than Contracts with customers, suppliers, agents, distributors or sales representatives (including “authorized dealers”) entered into in the Ordinary Course of Business and, for the avoidance of doubt, any Contracts entered into in connection with an action expressly permitted by any of the Subsections of this Section 7.1(a), including any material amendment, modification or supplement to an existing Contract in compliance with Section 7.1(a)(xii);
(xii) other than with respect to Material Contracts related to Indebtedness, which shall be governed by Section 7.1(a)(ix), Section 7.1(a)(vi) and Section 7.12, terminate, materially amend, materially waive, or assign, convey, encumber or otherwise transfer, in whole or in part, any material rights or interest pursuant to or in, any Material Contract, other than expirations of any such Contract in the Ordinary Course of Business and in accordance with the terms of such Contract with no further action by the Company or any of its Subsidiaries, except for any ministerial actions, or non-exclusive licenses, covenants not to ▇▇▇, releases, waivers or other rights under Intellectual Property Rights owned or purported to be owned by the Company or any of its Subsidiaries, in each case, that are granted in the Ordinary Course of Business;
(ixxiii) acquire cancel, modify or waive any real property debts or undertake similar claims held by the Company or commit to undertake capital expenditures for the purchase any of equipment or tangible assets exceeding its Subsidiaries having in each case a value in excess of $35,000 100 thousand in the aggregate;
(xxiv) agree toamend any License contemplated by Section 5.5(d) in any material respect, request or adopt allow any such License to lapse, expire or terminate (A) any moratorium except where the lapse, expiration or suspension of payment termination of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official such License is with respect to Sellera License that has become obsolete, (C) an assignment redundant or no longer required by applicable Law or for the benefit of creditors or an admission in writing operation of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (CCompany’s business);
(xi) incur any Indebtedness or issue any debt securities or warrants or other rights to acquire debt securities of Seller or assume, guarantee or endorse, as an accommodation or otherwise, the obligations of any Person for Indebtedness or capital obligations, in the case of any of the foregoing;
(xii) cancel any debts owed to or claims held by Seller in excess of $35,000;
(xiii) abandon, disclaim, dedicate to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreement;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Seller;
(xv) revalue any for the avoidance of the assets of the Sellerdoubt, except as required expressly provided for by GAAPSection 7.11, amend, modify, terminate, cancel or enter intolet lapse a material Insurance Policy, unless simultaneous with such termination, cancellation or permit any lapse, replacement self-insurance programs are established by the Company or one or more of its Subsidiaries or replacement policies underwritten by reputable insurance carriers are in full force and effect, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed Insurance Policies for substantially similar premiums, as applicable, as in effect as of the assets date of the Seller to become bound by any Contract that is or would constitute a Material Contractthis Agreement;
(xvi) other than with respect to Transaction Litigation, any Proceeding in connection with, arising out of or otherwise related to a demand for appraisal under Section 262 of the DGCL or any Tax claim, audit, assessment or dispute, which shall be governed by Section 7.16, Section 4.2(f) and Section 7.1(a)(xviii), respectively, settle or compromise any Proceeding for an amount in excess of $100 thousand in the aggregate during any calendar year, or which would reasonably be expected to (A) change any method have a materially negative impact on the operations and reputation of accounting or accounting practice, other than changes required under applicable Law or GAAP the Company and its Subsidiaries or (B) fail involve any criminal liability or any admission of material wrongdoing or any material wrongful conduct by the Company or any of its Subsidiaries;
(xvii) make any changes with respect to maintain accounting policies or procedures, except, in each case, as required by changes in GAAP;
(xviii) make, change or revoke any material Tax election, change an annual U.S. Federal Income or other material Tax accounting period, adopt or change any material Tax accounting method, file any amended Tax Return, enter into any closing agreement with respect to material Taxes, settle or compromise any material Tax claim, audit, assessment or dispute, surrender any right to claim a refund of a material amount of Taxes, or agree to an extension or waiver of the Seller’s booksstatute of limitations with respect to the assessment or determination of any material Tax;
(xix) cancel, accounts abandon or otherwise allow to lapse or expire any Intellectual Property Rights that are owned by the Company or any of its Subsidiaries and records are material to the businesses of the Company and its Subsidiaries, except, solely with respect to Intellectual Property Rights that are not material to the businesses of the Company and its Subsidiaries, in the Ordinary Course of Business;
(xviixx) makeexcept as required pursuant to the terms of any Company Benefit Plan in effect as of the date of this Agreement or as required by applicable Law, revoke (A) increase in any manner the compensation or change consulting fees, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any Tax election by Seller that could adversely impact the amount of Taxes due or payable Company Employee, (and/or any direct or indirect owner of equity interests B) become a party to, establish, adopt, amend, commence participation in Buyer) after the Closing Date;
(xviii) modify, amend or terminate any Company Benefit Plan or any arrangement that would have been a Company Benefit Plan had it been entered into prior to the date of this Agreement (other than pursuant offer letters providing for an “employment at will” relationship without any right to contractual severance, entered into with new hire employees in the expiration Ordinary Course of its term Business), (C) grant any new awards, or amend or modify the terms of any outstanding awards (including, in each case, Company Equity Awards), under any Company Benefit Plan, (D) take any action to accelerate the vesting or lapsing of restrictions or payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Benefit Plan, (E) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan that is required by applicable Law to be funded or change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP, (F) forgive any loans or issue any loans to any Company Employee (other than as routine travel advances issued in the Ordinary Course of Business and those loans, advances, guarantees or capital contributions expressly permitted by Section 7.1(a)(vi)), (G) hire any employee or engage any independent contractor (who is a result natural person) with an annual salary or wage rate or consulting fees in excess of $200,000 or (H) terminate the employment of any action taken by Seller, or executive officer other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunder;
(xix) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property;
(xx) commence, settle or compromise any Proceedingcause;
(xxi) cancelbecome a party to, materially reduce establish, adopt, amend, commence participation in or fail to maintain terminate any insurance policy;collective bargaining agreement or other agreement with a labor union, labor organization, works council or similar organization; or
(xxii) change or modify the Seller’s creditagree, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;
(xxiii) engage in any transaction with any Related Parties; or
(xxiv) authorize or enter into commit to do any agreement, commitment or understanding (whether written or oral) with respect to of the foregoing.
(b) Nothing set forth in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time or give the Company, directly or indirectly, the right to control or direct the Parent’s or Merger Sub’s operations prior to the Effective Time.
Appears in 1 contract
Sources: Agreement and Plan of Merger (Cards Acquisition Inc.)
Interim Operations. (a) From Each of the Company and Parent covenants and agrees as to itself and its Subsidiaries that, after the date hereof until and prior to the earlier of Effective Time (unless the Closing or termination of other party shall otherwise expressly approve in writing, and except as otherwise expressly contemplated by this Agreement) and except as required by applicable Laws, Seller the business of it and its Subsidiaries shall (i) operate the Business only be conducted in the Ordinary Course of Businessordinary and usual course and, including maintaining appropriate service levelsto the extent consistent therewith, it and in compliance with applicable Law including any COVID-19 Measures; and (ii) its Subsidiaries shall use commercially their respective reasonable best efforts to (A) preserve their business organizations intact and maintain and preserve intact the business organization existing relations and goodwill of the Businesswith Governmental Entities and Self-Regulatory Organizations, the Assets and the Assumed Liabilitiescustomers, (B) maintain satisfactory relationships with Seller’s clients, operatorssuppliers, distributors, customerscreditors, insurance underwriters lessors, key employees and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, associates and keep available the services ofof its and its Subsidiaries’ present employees and agents. During the period from the date of this Agreement through the Effective Time, each of the Business Employees.
(b) Company and Parent shall take all actions necessary to qualify as a REIT. Without limiting the generality of the foregoingforegoing and in furtherance thereof, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as the other party may approve in writing or (C) as set forth in Section 5.1(b) 6.1 of the Company Disclosure ScheduleLetter or Parent Disclosure Letter, as expressly permitted by this Agreement or as approved in writing by ▇▇▇▇▇applicable, from neither the date hereof until the earlier of the Closing or the termination of this AgreementCompany nor Parent will, Seller shall not take any action which would require disclosure on Section 2.8 of the Disclosure Schedule ornor will it permit its Subsidiaries to:
(i) take adopt or omit to take propose any action that results change in its declaration of trust or may reasonably be expected to result in any of the representations and warranties of Seller bylaws or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfiedother applicable governing instruments;
(ii) amend merge or consolidate itself or any of its Subsidiaries with any other Person, except for any such transactions among its wholly owned Subsidiaries, or restructure, reorganize or completely or partially liquidate or otherwise change the organizational documents of Sellerenter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) (A) authorizeacquire any business or Person by merger or consolidation, issuepurchase or lease assets, sell or transfer by any membership interests other manner, in a single or series of related transactions or acquire assets outside the ordinary course of business from any other securities Person with a value or purchase price in the aggregate in excess of Seller, (B) adjust, split, combine $1 million in any single or reclassify or otherwise amend the terms series of any membership interest or other security of Seller, (C) declare, authorize, set aside make or pay any dividend or other distribution (whether in cash, stock or other property) or (D) enter into any agreement with respect to the voting of any equity of Sellerrelated transactions;
(iv) issue, sell, pledge, dispose of, grant, transfer or encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, or encumbrance of, any shares of beneficial interest or capital stock in itself or any of its Subsidiaries (A) merge or consolidate with any other Person, acquire any business or assets of any other Person (whether by merger, stock purchase, asset purchase or other business combination), other than the purchase issuance of supplies shares by its wholly-owned Subsidiary to it or another of its wholly-owned Subsidiaries and other than Parent Common Shares upon the exercise of Parent Options and Parent Phantom Shares outstanding on the date of this Agreement and in accordance with the Ordinary Course existing terms thereof), or securities convertible or exchangeable into or exercisable for any such shares of Business beneficial interest or (B) form capital stock, or any new Subsidiaryoptions, warrants or other rights of any kind to acquire any such shares of beneficial interest or capital stock or such convertible or exchangeable securities, in all cases relating to its Subsidiaries outside the ordinary course of business;
(v) (A) materially change the operation of the Business, Assets create or the Assumed Liabilities incur any Lien material to it or any method of purchase, sale, lease, management, marketing, promotion its Subsidiaries on any of its assets or operation, except such changes as may be required to comply with any Law or of its Subsidiaries outside the terms of this Agreement or (B) enter into a new line ordinary course of business or abandon or discontinue an existing line in excess of business$50 million;
(vi) make any loans, advances or capital contributions to, to or investments in, in any Person (other than advances between itself and any of expenses to Business Employees its direct or indirect wholly-owned Subsidiaries) in the Ordinary Course excess of Business)$100 million;
(vii) (Asubject to Section 6.1(b) institute hereof, declare, set aside, make or announce pay any increase in the compensation, bonuses dividend or other benefits distribution, payable in cash, shares of beneficial interest or capital stock, property or otherwise, with respect to any Business Employees, of its shares of beneficial interest or capital stock (Bexcept for dividends paid by any direct or indirect wholly-owned Subsidiary to it or to any other direct or indirect wholly-owned Subsidiary) or enter into, amend or waive into any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance respect to the voting of its shares of beneficial interest or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause)capital stock;
(viii) transferreclassify, leasesplit, licensecombine, guaranteesubdivide or redeem, sell, mortgage, pledge, dispose of or incur any Lien on purchase or otherwise encumber acquire, directly or indirectly, any Assets, other than in the Ordinary Course of Businessits shares of beneficial interest or securities convertible or exchangeable into or exercisable for any of its shares of beneficial interest;
(ix) acquire incur any real property indebtedness for borrowed money or undertake or commit to undertake capital expenditures for the purchase guarantee such indebtedness of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become dueanother Person, or (D) any other thing under any applicable Law relating to bankruptcy issue or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur any Indebtedness or issue sell any debt securities or warrants or other rights to acquire any of its debt securities or of Seller any of its Subsidiaries, except for indebtedness for borrowed money incurred in the ordinary course of business (A) not to exceed $100 million, (B) in replacement of existing indebtedness for borrowed money, (C) guarantees incurred in compliance with this Section 6.1 by it of indebtedness of its wholly-owned Subsidiaries not to exceed $250 million or assume(D) interest rate swaps on customary commercial terms consistent with past practice and in compliance with its risk management policies in effect on the date of this Agreement and not to exceed $750 million of notional debt in the aggregate at any one time;
(x) make or authorize any capital expenditure in excess of $2 million in the aggregate during any 12-month period;
(xi) other than in the ordinary course of business, guarantee enter into any of the following (each, a “Material Contract”):
(A) any lease of real or endorsepersonal property providing for annual rentals of $1 million or more;
(B) any Contract that is reasonably likely to require either (x) annual payments to or from it and its Subsidiaries of more than $1 million or (y) aggregate payments to or from it and its Subsidiaries of more than $5 million;
(C) any partnership, joint venture or other similar agreement or arrangement relating to the formation, creation, operation, management or control of any partnership or joint venture material to it or any of its Subsidiaries or in which it owns more than a 15% voting or economic interest, or any interest valued at more than $5 million without regard to percentage voting or economic interest;
(D) any Contract required to be filed as an exhibit to the Company’s Form S-11 or the Parent’s Form 10-K, as an accommodation applicable;
(E) any non-competition Contract or otherwiseother Contract that (I) purports to limit in any material respect either the type of business in which it or its Subsidiaries (or, with respect to the obligations Company, after the Effective Time, Parent or its Subsidiaries) may engage or the manner or locations in which any of them may so engage in any business, (II) could require the disposition of any material assets or lines of business of it or its Subsidiaries or, with respect to the Company, after the Effective Time, Parent or its Subsidiaries, (III) grants “most favored nation” status that, following the Merger, would apply to Parent and its Subsidiaries, including the Company and its Subsidiaries or (IV) prohibits or limits its or any of its Subsidiaries’ rights to make, sell or distribute any products or services, or use, transfer, license, distribute or enforce any of their respective intellectual property rights;
(F) any Contract to which it or any of its Subsidiaries is a party containing a standstill or similar agreement pursuant to which the party has agreed not to acquire assets or securities of the other party or any of its Affiliates;
(G) any Contract between it or any of its Subsidiaries and any trustee or officer of it or any Person beneficially owning five percent or more of its outstanding shares;
(H) any Contract providing for indemnification by it or any of its Subsidiaries of any Person, except for any such Contract that is (x) not material to it or any of its Subsidiaries and (y) entered into in the ordinary course of business;
(I) any Contract that contains a put, call or similar right pursuant to which it or any of its Subsidiaries could be required to purchase or sell, as applicable, any equity interests of any Person for Indebtedness or capital obligationsassets that have a fair market value or purchase price of more than $5 million; and
(J) any other Contract or group of related Contracts that, if terminated or subject to a default by any party thereto, would, individually or in the case of any of the foregoingaggregate, reasonably be expected to result in a Company Material Adverse Effect or Parent Material Adverse Effect, as applicable;
(xii) cancel make any debts owed changes with respect to accounting methods, policies or claims held procedures, including any change in any method of accounting for Tax purposes, except as required by Seller in excess of $35,000GAAP or applicable Laws;
(xiii) abandonsettle any litigation or other similar proceedings before a Governmental Entity or Self-Regulatory Organization or otherwise for an amount in excess of $3 million or any obligation or liability of it in excess of such amount or that would impose any material restriction on its business or create precedents for claims that are reasonably likely to have a material adverse effect on it and its Subsidiaries, disclaim, dedicate to the public, sell, assign or grant any security interest in, to or under any Business Intellectual Property or Business IP Agreementtaken as a whole;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees in the ordinary course of Seller that are subject to a confidentiality business, amend, modify or non-disclosure covenant protecting against further disclosure thereof terminate any Material Contract, or to other contractors cancel, modify or representatives waive any debts or claims held by it or any of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Sellerits Subsidiaries;
(xv) revalue make any material Tax election unless such election is (i) required by Law, (ii) necessary to preserve its (A) qualification as a REIT or (B) status of any of its Subsidiaries as a partnership for federal income tax purposes, or as a qualified REIT subsidiary within the assets meaning of Section 856(i) of the Seller, except as required by GAAPCode, or enter into, or permit any as a taxable REIT subsidiary within the meaning of Section 856(l) of the assets of Code, as the Seller to become bound case may be or (iii) consistent with elections historically made by any Contract that is or would constitute a Material Contractit;
(xvi) take any action, or fail to take any action, which can reasonably be expected to cause (Ai) change any method of accounting or accounting practiceit to fail to qualify as a REIT, other than changes required under applicable Law or GAAP or (Bii) fail any of its Subsidiaries to maintain cease to be treated as a partnership for federal income tax purposes, as a qualified REIT subsidiary within the Seller’s booksmeaning of Section 856(i) of the Code, accounts and records in or as a taxable REIT subsidiary within the Ordinary Course meaning of BusinessSection 856(l) of the Code, as the case may be;
(xvii) makeother than in the ordinary course of business, revoke and with respect to Contracts in effect as of the date of this Agreement, transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or change allow to lapse or expire or otherwise dispose of any Tax election by Seller that could adversely impact the amount of Taxes due its material assets, product lines or payable (and/or businesses or of its Subsidiaries, including shares of beneficial interest or capital stock in any direct or indirect owner of equity interests in Buyer) after the Closing Dateits Subsidiaries;
(xviii) modifyexcept as required pursuant to Contracts in effect as of the date of this Agreement or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any of its trustee, officer or employee or of any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any of its trustee, officer or employee or of any of its Subsidiaries, (iii) establish, adopt, amend or terminate any of its benefit plans or amend the terms of any outstanding equity-based awards, (iv) take any action to accelerate the vesting or payment, or fund or in any other than pursuant way secure the payment, of compensation or benefits under any of its benefit plans, to the expiration extent not already provided in any such benefit plans, (v) materially change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to any of its term other than as a result or of any action taken by Sellerof its Subsidiaries’ trustees, officers or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunderemployees;
(xix) fail take any action or omit to pay take any required maintenance or other similar fees or otherwise fail action that is reasonably likely to make required filings or payments required result in any of the conditions to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property;the Merger set forth in Article VII not being satisfied; or
(xx) commenceagree, settle or compromise any Proceeding;
(xxi) cancel, materially reduce or fail to maintain any insurance policy;
(xxii) change or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;
(xxiii) engage in any transaction with any Related Parties; or
(xxiv) authorize or enter into commit to do any agreement, commitment or understanding (whether written or oral) with respect to of the foregoing.
(b) Notwithstanding anything to the contrary in this Agreement, prior to the Closing Date, Parent may declare and pay regular quarterly dividends to holders of Parent Common Shares in accordance with its regular dividend payment schedule, which dividend for the second quarter of 2006 shall not exceed $0.64 per share and which dividend for the third quarter of 2006 shall not exceed $0.65 per share. All such dividends shall meet the requirements of Code Section 561. If the Closing shall not have occurred prior to the record date of Parent’s third quarter dividend, the Company may declare and pay a quarterly dividend of not more than $0.35, such dividend to be payable to holders of record on the same record date as Parent’s third quarter dividend. Neither party shall declare a fourth quarter dividend until after either the Closing or the termination of this Agreement.
(c) Notwithstanding anything to the contrary in this Agreement, prior to the Closing Date, Parent may declare and pay regular quarterly dividends to the holders of the Parent Preferred Shares.
(d) Prior to making any written or oral communications to any of its or of any of its Subsidiaries’ trustees, officers or employees pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, each party shall provide the other party with a copy of the intended communication. The other party shall have a reasonable period of time to review and comment on the communication, and the parties hereto shall cooperate in providing any such mutually agreeable communication.
(e) Neither Parent nor any Affiliate of Parent shall purchase or otherwise acquire any beneficial interest or other security of the Company other than pursuant to this Agreement at the Effective Time.
(f) As promptly as practicable following the date hereof, Parent shall file with the Department the Merger Sub Articles Supplementary and the Company shall file with the Department the Company Articles Supplementary. At least 15 days prior to the Effective Time, Merger Sub shall issue (i) 120 shares of Merger Sub Preferred Stock to 120 separate persons and (ii) 600 shares of Merger Sub Preferred Stock to Parent, in each case, at a price equal to $1,000 per share.
Appears in 1 contract
Interim Operations. (a) From The Company covenants and agrees as to itself and its Subsidiaries that, from the date hereof of this Agreement until the earlier Effective Time (unless Parent shall otherwise approve in writing and except as otherwise expressly contemplated by this Agreement and except as required by applicable Laws), the business of the Closing or termination of this Agreement, Seller it and its Subsidiaries shall (i) operate the Business only be conducted in the Ordinary Course of Businessordinary and usual course and, including maintaining appropriate service levelsto the extent consistent therewith, it and in compliance with applicable Law including any COVID-19 Measures; and (ii) its Subsidiaries shall use their respective commercially reasonable efforts to (A) preserve the assets and properties of the Company and to preserve their business organizations intact and maintain and preserve intact the business organization existing relations and goodwill of the Business, the Assets and the Assumed Liabilities, (B) maintain satisfactory relationships with Seller’s clients, operators, distributorsGovernmental Entities, customers, insurance underwriters vendors, employees and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services of, the Business Employees.
(b) associates. Without limiting the generality of the foregoingforegoing and in furtherance thereof, from the date of this Agreement until the Effective Time, except (A) as otherwise contemplated or required by this Agreement, (B) as Parent may approve in writing, (C) as required by applicable Laws or any Governmental Entity or (D) as set forth in Section 5.1(b6.1(a) of the Company Disclosure ScheduleLetter, as expressly permitted by this Agreement or as approved in writing by ▇▇▇▇▇the Company will not, from the date hereof until the earlier of the Closing or the termination of this Agreementand will not permit its Subsidiaries, Seller shall not take any action which would require disclosure on Section 2.8 of the Disclosure Schedule orto:
(i) take adopt or omit to take propose any action that results change in its charter or may reasonably be expected to result in any of the representations and warranties of Seller bylaws or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfiedother applicable governing instruments;
(ii) amend merge or otherwise change consolidate the organizational documents Company or any of Sellerits Subsidiaries with any other Person, except for any such transactions among Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate the Company;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of $1,000,000 in any transaction or series of related transactions, other than acquisitions pursuant to agreements, contracts or other documents in effect as of the date of this Agreement or the creation and ownership of newly formed wholly owned Subsidiaries;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer or encumbrance of, any shares of capital stock of the Company or any its Subsidiaries (other than (A) authorizethe issuance of Shares upon the exercise of Company Options or Warrants, issueand the settlement of Restricted Stock (and dividend equivalents thereon, sell or transfer any membership interests or other securities if applicable), in each case pursuant to the terms of Sellerthe Stock Plans and Warrants as in effect on the date hereof, (B) adjust, split, combine the issuance of shares of capital stock by a wholly owned Subsidiary of the Company to the Company or reclassify another wholly owned Subsidiary of the Company or otherwise amend the terms of any membership interest or other security of Seller, (C) the pledge of shares of capital stock of Subsidiaries of the Company in connection with the Financing Agreement), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible, exchangeable or exercisable securities;
(v) make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly owned Subsidiary of the Company) in excess of $500,000 in the aggregate;
(vi) declare, authorizeset aside, set aside make or pay any dividend or other distribution (whether distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for dividends paid by any direct or indirect wholly owned Subsidiary of the Company to the Company or to any other propertydirect or indirect wholly owned Subsidiary of the Company) or (D) enter into any agreement with respect to the voting of any equity of Seller;
(iv) (A) merge or consolidate with any other Person, acquire any business or assets of any other Person (whether by merger, stock purchase, asset purchase or other business combination), other than the purchase of supplies in the Ordinary Course of Business or (B) form any new Subsidiary;
(v) (A) materially change the operation of the Business, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of business;
(vi) make any loans, advances or its capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of Business)stock;
(vii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than the (A) institute acquisition of any Shares tendered by current or announce any increase former employees or directors consistent with past practices pursuant to the Stock Plans (including in order to pay Taxes in connection with the compensation, bonuses exercise of Company Options or other benefits payable to any Business Employees, the settlement of Restricted Stock) or (B) enter into, amend acquisition of any shares of capital stock of a wholly owned Subsidiary of the Company by the Company or waive any rights under any employment, consulting, severance or change wholly owned Subsidiary of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for causethe Company);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on Specified Indebtedness or otherwise encumber any Assets, guarantee such Specified Indebtedness of another Person (other than in the Ordinary Course of Business;
(ix) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing wholly owned Subsidiary of the inability of Seller to pay its debts as they become dueCompany), or (D) any other thing under any applicable Law relating to bankruptcy issue or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur any Indebtedness or issue sell any debt securities or warrants or other rights to acquire any debt securities security of Seller the Company or assumeany of its Subsidiaries, guarantee except in each case for incurrences, guarantees, issuances or endorsesales of Specified Indebtedness to the extent that Section 5.1(e)(iv) would not be breached as a result thereof and except for transactions between or among the Company or any of its Subsidiaries, as an accommodation with or otherwiseamong the Company and any other Subsidiaries;
(ix) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of the Company or any Subsidiary (other than this Agreement, the obligations of any Person for Indebtedness Merger or capital obligations, as otherwise permitted hereunder pursuant to Section 6.2);
(x) except as set forth in the case of any capital budgets set forth in Section 6.1(a)(ix) of the foregoingCompany Disclosure Letter, make or authorize any capital expenditure in excess of $1,000,000 in the aggregate;
(xi) make any material changes with respect to accounting policies or procedures, except as required by changes in GAAP or a Governmental Entity;
(xii) cancel settle any debts owed to litigation or claims held by Seller other proceedings before a Governmental Entity for an amount in excess of $35,000500,000 or any obligation or liability of the Company in excess of such amount;
(xiii) abandonother than in the ordinary course of business and consistent with past practice, disclaimmake, dedicate change or rescind any material Tax election, change any method of Tax accounting, settle or compromise any material Tax liability, file any material amended Tax Return, enter into any closing agreement relating to the publicTaxes, sell, assign or grant waive or extend any security interest in, to or under any Business Intellectual Property or Business IP Agreementmaterial Tax statute of limitations;
(xiv) disclose transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any confidential assets, product lines or proprietary information businesses of the Company or confidential Business Intellectual Property its Subsidiaries, including capital stock of any of its Subsidiaries, in each case which are material to any Personthe Company and its Subsidiaries taken as a whole, other than employees (A) in the ordinary course of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality business and non-disclosure consistent with past practice, (B) pursuant to a written agreement agreements, contracts or other documents in effect prior to the date of this Agreement, and (C) transactions between or among the Company or any of its Subsidiaries, with or among the SellerCompany and any other Subsidiaries;
(xv) revalue any of the assets of the Seller, except as required by GAAPpursuant to Benefit Plans, agreements, contracts or other documents in effect prior to the date of this Agreement disclosed or made available to Parent, or enter intoas otherwise required by applicable Laws, (A) grant or provide any severance or termination payments or benefits to any director or officer of the Company or any of its Subsidiaries, or permit to any other employee of the Company or any of its Subsidiaries except in the assets ordinary course of business consistent with past practice, (B) increase the compensation or make any new equity awards to any director, officer or other employee of the Seller Company or any of its Subsidiaries, except for increases in compensation to become bound by employees that are not officers in the ordinary course of business and consistent with past practice, (C) establish, adopt, terminate or materially amend any Contract that is Benefit Plan (other than routine changes to welfare plans for 2009), (D) make any equity-based or would constitute a Material Contractother compensation awards to any director, officer or other employee of the Company or any of its Subsidiaries, except pursuant to commitments or agreements in effect on the date hereof or (E) take any action to fund, or require the funding of, any compensation or benefits under any Benefit Plan;
(xvi) enter into or amend in any material respect any transaction or agreement between (Ai) change the Company or any method Subsidiaries, on the one hand, and (ii) any affiliate of accounting or accounting practice, the Company (other than changes any of the Company’s Subsidiaries), on the other hand, of the type that would be required to be disclosed under applicable Law or GAAP or (B) fail to maintain Item 404 of Regulation S-K promulgated by the Seller’s books, accounts and records in the Ordinary Course of BusinessSEC;
(xvii) make, revoke knowingly take or change permit any Tax election by Seller of its Subsidiaries to take any action that could adversely impact is intended to or reasonably likely to prevent the amount consummation of Taxes due or payable the Merger (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date;other than as permitted pursuant to Section 6.2); or
(xviii) modifyagree, amend or terminate (other than pursuant to the expiration of its term other than as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunder;
(xix) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property;
(xx) commence, settle or compromise any Proceeding;
(xxi) cancel, materially reduce or fail to maintain any insurance policy;
(xxii) change or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;
(xxiii) engage in any transaction with any Related Parties; or
(xxiv) authorize or enter into commit to do any agreement, commitment or understanding (whether written or oral) with respect to of the foregoing.
(b) Parent shall not knowingly take or permit any of its Subsidiaries to take any action that is intended to or reasonably likely to prevent the consummation of the Merger.
Appears in 1 contract
Interim Operations. (a) From The Company covenants and agrees as to itself and its Subsidiaries that, from the date hereof of this Agreement until the earlier Effective Time (unless Parent shall otherwise approve in writing and except as otherwise expressly contemplated by this Agreement and except as required by applicable Laws), the business of the Closing or termination of this Agreement, Seller it and its Subsidiaries shall (i) operate the Business only be conducted in the Ordinary Course of Businessordinary and usual course consistent with past practice and, including maintaining appropriate service levelsto the extent consistent therewith, it and in compliance with applicable Law including any COVID-19 Measures; and (ii) its Subsidiaries shall use commercially their respective reasonable best efforts to (A) preserve their business organizations intact and maintain and preserve intact the business organization existing relations and goodwill of the Business, the Assets and the Assumed Liabilities, (B) maintain satisfactory relationships with Seller’s clients, operators, distributorsGovernmental Entities, customers, insurance underwriters suppliers, employees and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services of, the Business Employees.
(b) associates. Without limiting the generality of the foregoingforegoing and in furtherance thereof, from the date of this Agreement until the Effective Time, except (A) as otherwise contemplated or required by this Agreement, (B) as Parent may approve in writing, (C) as required by applicable Laws or any Governmental Entity or (D) as set forth in Section 5.1(b6.1(a) of the Company Disclosure ScheduleLetter, as expressly permitted by this Agreement or as approved in writing by ▇▇▇▇▇the Company will not, from the date hereof until the earlier of the Closing or the termination of this Agreementand will not permit its Subsidiaries, Seller shall not take any action which would require disclosure on Section 2.8 of the Disclosure Schedule orto:
(i) take adopt or omit to take propose any action that results change in its certificate of incorporation or may reasonably be expected to result in any of the representations and warranties of Seller By-laws or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfiedother applicable governing instruments;
(ii) amend merge or otherwise change consolidate the organizational documents Company or any of Sellerits Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiaries;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of $1 million in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement and set forth in Section 6.1(a)(iii) of the Company Disclosure Letter;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer or encumbrance of, any shares of capital stock of the Company or any its Subsidiaries (other than (A) authorizethe issuance of Shares upon the exercise of Company Options, issuethe settlement of Restricted Share and conversion of the Convertible Notes (and dividend equivalents thereon, sell if applicable) in each case which Company Options, Restricted Share or transfer any membership interests Convertible Notes were outstanding as of the date hereof or other securities of Seller, (B) adjustthe issuance of shares of capital stock by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company), splitor securities convertible or exchangeable into or exercisable for any shares of such capital stock, combine or reclassify any options, warrants or otherwise amend the terms other rights of any membership interest kind to acquire any shares of such capital stock or such convertible, exchangeable or exercisable securities;
(v) make any loans, advances or capital contributions to or investments in any Person (other security than the Company or any direct or indirect wholly owned Subsidiary of Seller, the Company) in excess of $1 million in the aggregate;
(Cvi) declare, authorizeset aside, set aside make or pay any dividend or other distribution (whether distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for dividends paid by any direct or indirect wholly owned Subsidiary of the Company to the Company or to any other propertydirect or indirect wholly owned Subsidiary of the Company) or (D) enter into any agreement with respect to the voting of any equity of Seller;
(iv) (A) merge or consolidate with any other Person, acquire any business or assets of any other Person (whether by merger, stock purchase, asset purchase or other business combination), other than the purchase of supplies in the Ordinary Course of Business or (B) form any new Subsidiary;
(v) (A) materially change the operation of the Business, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of business;
(vi) make any loans, advances or its capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of Business)stock;
(vii) (A) institute reclassify, split, combine, subdivide or announce redeem, purchase or otherwise acquire, directly or indirectly, any increase in the compensation, bonuses of its capital stock or other benefits payable to securities convertible or exchangeable into or exercisable for any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change shares of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee its capital stock (other than for causethe acquisition of any Shares tendered by current or former employees or directors in order to pay Taxes in connection with the exercise of Company Options or the settlement of Restricted Share in accordance with the terms of the applicable plan);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any Lien on indebtedness for borrowed money or otherwise encumber any Assets, guarantee such indebtedness of another Person (other than in the Ordinary Course of Business;
(ix) acquire any real property or undertake or commit to undertake capital expenditures for the purchase of equipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing wholly owned Subsidiary of the inability of Seller to pay its debts as they become dueCompany), or (D) any other thing under any applicable Law relating to bankruptcy issue or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur any Indebtedness or issue sell any debt securities or warrants or other rights to acquire any debt securities security of Seller the Company or assumeany of its Subsidiaries, guarantee except for indebtedness for borrowed money incurred in the ordinary course of business;
(ix) except as set forth in the capital budgets set forth in Section 6.1(a)(ix) of the Company Disclosure Letter, make or endorseauthorize any capital expenditure in excess of $1 million in the aggregate;
(x) make any material changes with respect to accounting policies or procedures, except as an accommodation required by changes in GAAP or applicable Law;
(xi) compromise, settle or agree to settle any suit, action, claim, proceeding or investigation (including any suit, action, claim, proceeding or investigation relating to this Agreement or the transactions contemplated hereby) or pay, discharge or satisfy or agree to pay, discharge or satisfy any claim, liability or obligation (absolute or accrued, asserted or unasserted, contingent or otherwise) other than the compromise, the settlement, payment, discharge or satisfaction of claims, liabilities or obligations of any Person for Indebtedness or capital obligations, in the ordinary course of business consistent with past practice which in any event does not exceed in any individual case $500,000 or an aggregate of any of the foregoingmore than $2 million;
(xii) cancel other than in the ordinary course of business and consistent with past practice, make or change any debts owed material Tax election or settle or compromise any material Tax liability and except as are not, individually or in the aggregate, material to the business or claims held the Company and its Subsidiaries, taken as a whole, except as required by Seller Law, change any of its material methods of reporting income or deductions for federal income tax purposes from those employed in excess the preparation of $35,000its federal income tax returns for the taxable year ended June 30, 2005;
(xiii) abandon, disclaim, dedicate to the publictransfer, sell, assign lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or grant allow to lapse or expire or otherwise dispose of any security interest inassets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, in each case which are material to or under any Business Intellectual Property or Business IP Agreementthe Company and its Subsidiaries taken as a whole, other than inventory, supplies and other assets in the ordinary course of business and other than pursuant to Contracts in effect prior to the date of this Agreement and set forth in Section 6.1(a)(xiii) of the Company Disclosure Letter;
(xiv) disclose except as required pursuant to Contracts in effect prior to the date of this Agreement, or as otherwise required by applicable Laws, (A) grant or provide any confidential severance or proprietary information termination payments or confidential Business Intellectual Property benefits to or increase the compensation or make any new equity awards to any Persondirector, officer or other than employees employee of Seller that are subject to a confidentiality the Company or any of its Subsidiaries, except for increases of non-disclosure covenant protecting against further disclosure thereof or equity compensation to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality non-director and non-disclosure pursuant officer employees in the ordinary course of business consistent with past practice, or (B) establish, adopt, terminate or materially amend any Benefit Plan (other than routine changes to a written agreement with the Sellerwelfare plans for 2007);
(xv) revalue change in any material respect its debt collection practices; or
(xvi) agree, authorize or commit to do any of the assets of the Seller, except as required by GAAP, or enter into, foregoing.
(b) Parent shall not knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent or, solely in connection with the assets acquisition of an interest in an Internet marketing services business, delay in a material respect the consummation of the Seller to become bound by any Contract that is or would constitute a Material Contract;
(xvi) (A) change any method of accounting or accounting practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Business;
(xvii) make, revoke or change any Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect owner of equity interests in Buyer) after the Closing Date;
(xviii) modify, amend or terminate (other than pursuant to the expiration of its term other than as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect or termination release or assign any material rights or claims thereunder;
(xix) fail to pay any required maintenance or other similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, let lapse or fail to protect any Owned Intellectual Property;
(xx) commence, settle or compromise any Proceeding;
(xxi) cancel, materially reduce or fail to maintain any insurance policy;
(xxii) change or modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of payables or other Liabilities in any material respect;
(xxiii) engage in any transaction with any Related Parties; or
(xxiv) authorize or enter into any agreement, commitment or understanding (whether written or oral) with respect to the foregoingMerger.
Appears in 1 contract
Sources: Merger Agreement (Vertrue Inc)